Maharashtra deputy chief minister and home minister Gopinath Munde said that the bill has got the presidential assent and will be tabled in the state legislature in the ensuing monsoon session. The objective is to protect small investors who have been cheated by such financial establishments.

"There has been mushrooming growth of financial establishments in Maharashtra with the sole objective of grabbing public deposits offering highly attractive rate of returns," the bill said. A large number of such financial establishments have defaulted to return the deposits or pay interests to the depositors.

The bill will have provision to attach theproperties of such defaulting financial establishments who have "fradulently default any repayment of deposits and any benefits in the terms of interest, bonus, profit as promised or render services as assured against the deposits". The propmoters of such financial establishments will be subjected to a mamimum six years imprisonment and fine worth Rs 1 lakh.

Under the proposed bill, the government will have the powers to attach the properties of malafide transferees. The defaulting companies ofen transfer its property to its partners or others to avoid the legal provisions. The bill has also proposed setting up of designated court to deal with such cases and a competent authority to listen to the grievances. It has also proposed appointment of special public prosecutor.

In a related development, Mumbai-based Investors Forum has filed a writ petition in the Bombay High Court against the Securities and Exchange Board of India (SEBI) and others for the cheating of small investors by the "vanishingcompanies".

The petitioner has demanded that SEBI should be asked to investigate affairs of all such companies and assets of their promoters. It has pleaded that once the company was delisted from the Bombay Stock Exchange, any new company that may be promoted by its promoters should not be listed on the BSE.

The petitioner cited several instances where promoters--after having induced investors--have failed to meet the financial projections made in the prospectus. Such promoters change their registered offices and share transfer agents, it said.

The petitioner has moved prime minister seeking action for non-fulfilment of statutory compliance of SEBI guidelines and provisions of the listing agreement with the stock exchange. The petitioner has called for appropriate provisions to initiate criminal proceedings against defaulting promoters.