Govt warns action against all involved in chitfund scams

All those involved in cheating investors in chit funds companies will not be spared and action will be taken against them whatever post they may hold, the government said in Lok Sabha on Friday.

Finance Minister Arun Jaitley said the Sebi was looking into the chit fund issues and efforts were on to seize the properties of such companies and sell them so that the investors' money can be returned.

"Some money has been retrieved after a complicated procedure. Whoever has done, whatever post he may be holding, action will be taken against them as per law," he said during the Question Hour.

Jaitley's response came after Congress MP Adhir Ranjan Chowdhury said thousands of people in West Bengal were cheated by chit fund companies, where several prominent persons were allegedly involved.

Choudhury was supported by members of the Left parties.

TMC leader in Lok Sabha, Sudip Bandyopadhyay, had in the past been arrested by the CBI in connection with the Rose Valley chit fund scam in West Bengal.

Jaitley said the government was working on enacting an effective legislation to protect the investors' interests.

As per the Companies Act, a private company is permitted to accept deposits from its Directors and their relatives and also up to certain limit from its members only.

Jaitley said various complaints in respect of violations of terms and conditions of the deposits have been received by Registrar of Companies (ROCs) against 24 private companies, as per the provisions of the Companies Act.

"Prosecutions under the provisions of the Companies Act, 1956/2013 have been filed against the four companies involving 15 cases, which are sub-judice, and in other cases the matter is under examination or at inquiry/inspection stage," he said.