Ponzi Scheme and Indian Laws
15 Pages Posted: 11 Jun 2021
Date Written: may 2, 2021
Ponzi scheme, multi-level marketing (MLM) programs or pyramid schemes disguised as direct selling companies are India's nightmare. The problem is huge. In fact, it's so good that the massive redemptions ordered by the Securities & Exchange Board of India (SEBI) in the case of Sahara group companies (Rs 25,000 crore plus interest) or PACL (Rs 49,100 crore) don't even start the surface of money stolen from ordinary savers. The Indian Legislature has sadly been extremely slow on the uptake and as a result many well-known ponzi schemes have been able to thrive undetected. This paper will tend to discuss the laws pertaining to the ban of Ponzi like schemes in India.
Keywords: Ponzi Scheme, SEBI, MCA, Companies Act, Prize chits and money circulation
JEL Classification: G32
Suggested Citation: Suggested Citation