Govt finalising rules for multi-level marketing companies, stop corporate fraud
The Serious Fraud Investigation Office (SFIO) -- under the Corporate Affairs Ministry -- is working on an early warning system that would help in preventing corporate frauds.
Corporate Affairs Minister Veerappa Moily said the SFIO has already set up a computer lab for this.
"This is part of the ministry's vision for having enlightened regulations," Moily said, while addressing the Economic Editors' Conference here.
The analysis wing of SFIO has come out with many reports and the ministry is acting upon that information, he added.
Besides, the ministry said the new rules for multi-level marketing companies have almost been finalised.
"We had a close discussion with the Department of Financial Services in the Ministry of Finance. The Act, the Prize Chits and Money Circulation Schemes Act (Banning) 1978, under which these activities can be controlled are under their purview," Corporate Affairs Secretary Naved Masood said.
"Together, we have decided that we should have new rules to prevent these companies from getting on with their nefarious activities," he added.
The new rules have been finalised and the RBI has been consulted on the same, Masood added.
Further, he noted that the Registrars of Companies (RoCs) have been asked to be "very very alert about the activities of these (multi-level marketing) companies, particularly where they give advertisements etc..."
SFIO is already investigating alleged scam at SpeakAsia, which is registered in Singapore. The ministry had ordered
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