Posts Tagged ‘MLM Companies’


Department of Financial Services has constituted an Inter-Ministerial Group consisting of the representatives from Department of Financial Services, Ministry of Corporate Affairs, Reserve Bank of India, Securities and Exchange Board of India, Department of Consumers Affairs and Central Economic Intelligence Bureau (CEIB) to draft model Rules on Multi Level Marketing (MLM) Companies and on the prohibited schemes under The Prize Chits and Money Circulation Schemes (Banning) Act, 1978. Giving this information in written reply to a question in the Lok Sabha today, Shri Sachin Pilot, Minister of Corporate Affairs, informed the House that the said Inter-Ministerial Group will also frame clarificatory guidelines on how to distinguish between genuine direct sales from disguised money circulation Schemes.

Source: Press Information Bureau.


Decision to publish names of Multi Level Marketing companies which come to adverse notice of this Ministry is under consideration of the Ministry of Corporate Affairs. Giving this information in written reply to a question in the Lok Sabha today Shri Sachin Pilot, Minister of Corporate Affairs, however, said that the members of the public can view the names of the companies registered under the Companies Act, 1956 and documents filed by any company on MCA-21 portal of his Ministry by paying a nominal fee of Rs.50/- (Fifty only).

Source: Press Information Bureau.


The Serious Fraud Investigation Office has undertaken investigation into the affairs of certain companies undertaking business in the ‘Multi-Level Marketing’ (MLM) mode. Giving this information in written reply to a question in the Parliament, Shri Sachin Pilot, Minister of Corporate Affairs, said that the websites of these companies were found non-operational at the commencement of investigations, which are underway. If any websites carrying of ‘MLM’ activities are found operational, suitable action will be taken as per law.

Source: Press Information Bureau.


On the basis of specific complaints received in the Ministry, Regional Directors (RDs) and Registrar of Companies (RoCs) have been directed to Scrutinize the Balance Sheets and Inspect the books of accounts and other records under sections 234 and 209A respectively of the Companies Act, 1956 in respect of 87 companies, alleged to be carrying on the activities relating to prize chit fund and money circulation in the garb of multi-level marketing.

The Serious Fraud Investigation Office (SFIO) had recommended for setting up of a specific central regulatory agency for the implementation of the Prize Chit and Money Circulation Scheme (Banning) Act, 1978. This Act is administered by the Department of Financial Services, who has constituted an Inter-Ministerial Group consisting of the representatives from Department of Financial Services, Ministry of Corporate Affairs, Reserve Bank of India, Securities Exchange Board of India, Department of Consumers Affairs and Central Economic Intelligence Bureau (CEIB) to –

(i) Draft Model Rules on the Multi Level Marketing Companies and on the prohibited schemes under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978;

(ii) Frame clarificatory guidelines on how to distinguish between genuine direct sales from disguised money circulation Schemes.

This information was given by Minister of State for Corporate Affairs Shri R.P.N. Singh in reply to a written question in the Rajya Sabha today.

Source: Press Information Bureau.

 

 

 


Government is aware of a number of multi-level marketing companies operating in the country are disguised as those selling products but they are inherently operating money circulation scheme. Some complaints have been received, in the light of which, the Government, in Department of Financial Services, has constituted an Inter- Ministerial Group consisting of representatives from Department of Financial Services, Ministry of Corporate Affairs, Reserve Bank of India, Securities Exchange Board of India, Department of Consumers Affairs, CIEB (Department of Revenue) and SFIO to –

(i) Draft Model Rules on the Multi Level Marketing Companies and on the prohibited scheme under the prize Chits and Money Circulation Schemes (Banning) Act, 1978.

(ii) Frame clarificatory guidelines on how to distinguish between genuine direct sales from disguised money circulation scheme.

This information was given by Minister of State for Corporate Affairs Shri R.P.N. Singh in reply to a written question in the Rajya Sabha today.

Source: Press Information Bureau.