Geetha Reddy asks people not to get carried away by their promises

The government is serious about bringing to book those defrauding people by operating the Ponzi schemes- related to money circulation, gold and real estate, said Minister for Major Industries J. Geetha Reddy here on Tuesday. Responding to the concern expressed by several members in the Legislative Council about the growing menace of fraudulent schemes robbing people of all their savings, Dr. Reddy, who is handling the Home portfolio, admitted that these were serious offences.

Several laws were in place and there was no question of the government leaving them. At the same time, people should remain alert and not fall into the trap of such companies luring them with 18-20 per cent of interest on their deposits. An awareness campaign should also be taken up to caution people about such dubious companies, she added.

In reply to M.V.S. Sarma and V. Balasubramanyam (PDF), who sought to know measures taken to protect the interests of thousands of depositors in a money circulation company, SIMS in Visakhapatnam, Dr. Geetha Reddy said the company had collected Rs.340 crore from over 48,000 depositors and defaulted to a tune of Rs.112 crore. Criminal cases were filed and the case was handed over to the CID for investigation.

The main accused K. Surendra Babu and 11 others were arrested and remanded to judicial custody and immovable properties worth Rs.14 crore had already been seized. The CID was in the process of identifying their other properties and would initiate steps for attachment and auction of such properties for refund to victims of SIMS, she said. The company had its operations in Vizianagaram, Rajahmundry, Visakhapatnam and several other districts and the cases were registered in those areas too.

Mr. G. Srinivasulu Naidu (Teacher) said that a special police cell be set up to look into the operations of such money circulating companies in the initial stages itself by checking their credentials.

  • Criminal cases filed against SIMS which duped people to the tune of Rs.112 cr.

  • Special police cell to look into the operations of such companies mooted