New Delhi: As it goes after fraudsters who dupe gullible investors of their hard earned money, capital markets regulator Sebi has launched an all-out mass media campaign to make the public aware about troubles of investing on hearsay and in pursuit of high returns in less time.
Using various media including TV, radio and print, the Securities and Exchange Board of India is specially targeting the collective investment schemes (CIS) wherein investors are promised doubling of their investments within a few months, or guaranteed fixed returns for their entire life after investing some thousands or lakhs of rupees.
For the maximum impact, Sebi has roped in professional agencies for these campaigns and have made them in as many as 13 languages -- Bengali, Assamese, Oriya, Gujarati, Kannada, Malyalam, Marathi, Punjabi, Tamil, Telugu and Urdu, besides Hindi and English.
These campaigns are being used all over the country with special focus on states like West Bengal, Bihar, Jharkhand, Chhatisgarh, Odisha, Maharashtra and Tamil Nadu, where larger number of investors are affected by such schemes.
"Invest thousands. Earn lakhs in no time. How is this even possible?" Sebi says in one of its latest such campaigns.
"High returns in less time is trouble," the regulator said, while asking the investors to check the investment scheme details carefully before investing.
In another campaign, Sebi has sought to bust one of the most commonly used tactics by those selling such fraudulent scheme, where they cite the example of someone very close having doubled the money in no time.
Like a chain reaction, everyone gives the example of this person, who may not exist at all.
In a TV campaign, Sebi has used the example of one fictional 'Kumar Sir', who everyone believes that has earned big returns and therefore they also decide to follow suit, unless someone asks who was this 'Kumar' actually.
"Do not go by just what people say and think before you invest," Sebi said, while asking investors to do their own research to make any investment decision.
Besides, Sebi has also been cautioning investors through its investor education meetings across the country.
A large number of such fraudulent activities, many of which are in nature of Ponzi schemes wherein money is collected from a large number of investors, and new investors' money is used to give returns to some previous clients till the operator runs away, have come to light in recent years.
While more than 500 such schemes have already faced Sebi's ire for defrauding investors, thousands others of significant sizes and scales are estimated to be functional in different parts of the country.
A senior official said Sebi and other regulatory and enforcement agencies crack down on such schemes whenever they come to know about them.
He added however that it is essentially public awareness about such frauds that could tackle this menace in a much more effective manner as these activities are mostly run in a very clandestine manner and it is only at a later stage that a regulator gets a whiff about them.
Adopting a multi-pronged approach, Sebi has decided to step up its investor awareness programmes about such schemes, while it continues to take action against entities engaged in such fraudulent activities.
Through these campaigns, Sebi is trying to bust the modus operandi of various ponzi operators. In one such campaign, agents of one 'superb' scheme is heard telling people about those having bought big cars, big houses and other luxuries with returns earned by them and by doubling their money in six months.
In another scheme, agents promise guaranteed fixed return of Rs 10,000 every month after six months with an initial investment of Rs 50,000.
Asking investors that these claims of 'unrealistic returns' should be taken as far away from truth, Sebi campaign says that these should be treated similar to the claims like two-three drops of certain oil helping bald people get hair, or some sauna belt reducing weight by kilos within a few days, or even some 'lucky locket' changing the fortune within seconds of wearing the same.
"Beware of unrealistic returns. Big gains in less time is sign of fraud," the regulator says.
To create more awareness about capital market and to protect investors' interests, Sebi also plans to initiate campaigns through mobile as well as Internet platforms and by collaborating with industry bodies.
In December, Sebi had also launched a campaign on 'Investor Grievance Redressal Mechanism', wherein it had focussed on spreading investor awareness about Sebi's role and platform for resolving the complaints of investors.
Continuing its crackdown on companies illegally raising money from gullible investors, SEBI in the last one month itself passed a series of orders.
These companies were raising funds through various 'collective investment schemes' and also through redeemable preference shares and debentures, from large number of investors without adhering to Sebi norms.
Some of the orders passed by Sebi were against companies whose sister concerns were already subject to similar orders issued by the regulator earlier. These included companies from groups like Saiprasad Corp and Nicer Green Housing.
Others to have faced Sebi crackdown include Dhanolty Developers and Pancard Club India Ltd, which is alleged to have raised more than Rs 3,000 crore rupees from nearly 25 lakh investors.
