New Delhi:The Finance minister said that it was presently possible for the companies to set up their illicit investment schemes in such as way so that they can avoid oversight by either of the regulators or the government departments.
Talking about multi-level marketing companies and the cases like Amway, Mr Chidambaram said changes are also required in the regulations to safeguard the interest of genuine companies.
“The law perhaps requires to be amended to provide for the genuine multi level marketing which do not fall wunder the definition of illegal money circulation,” he said on the case involving arrest of Amway India’s Chairman and two directors in Kerala.
“Under the prevailing law, certain multi-level marketing schemes can be taken as to be illegal. So, it is possible that the state police took the view ~ I am not saying whether it’s correct or not ~ that what the company was doing was illegal under the present law as interpreted by the court.” Mr Chidambaram further said the arrest was probably “a bit over the top” as he was not running away and the police could have filed an FIR and investigated the matter.
“These are regulatory gaps and what we are trying to do is to reduce these gaps to maximum possible extent, so that everyone falls either under the Reserve Bank of India (RBI), or Securities and Exchange Board of India (Sebi), or the Registrar of Chits or under the state government, etc,” he said. The comments come in the wake of wide-ranging amendments proposed by the government to the Sebi Act and other regulations to give the capital markets regulator greater powers to deal with various kinds of investment schemes