Bhubaneswar, Aug. 13: President Pranab Mukherjee has given his assent to the Odisha Protection of Interests of Depositors (in Financial Establishments) Bill, 2011, giving hope to lakhs of investors who have lost money by investing in sham deposit collection companies.
Finance minister Prasanna Acharya said: “Now, the investors can hope to get their money back. Though the government of India had asked for clarifications on four points, it has not made any amendments. Rather, it has given its assent to the original bill.”
He said rules would soon be framed to make it an Act. A special designated court will be set up to attach the properties of non-banking financial companies (NBFCs) and order their sale to compensate the public for their loss. “The court can pass an order for confiscating and auctioning properties of the NBFCs while the case is going on. All procedures will be completed within 180 days. Money will be paid to the investors from the sale proceeds,” the minister said.
The state government admitted that the scam was around Rs 4,375 crore. Nearly 6.89 lakh investors have been cheated. In its report, the government has said that 280 cases have been lodged against 127 companies and 315 people had been arrested.
The state government earlier constituted a corpus fund of Rs 300 crore to assist investors who lost their money to fraud financial companies. However, it had refused to hand over the fraud cases to the CBI. Saying that the government was committed to provide justice to the duped investors, Acharya said: “The bill will be placed in the Assembly in the monsoon session starting August 20. However, there will be no more debate on this issue.”
While the Assembly had passed the Bill on December 17, 2011, the government had submitted clarifications regarding it in April last year.
Till now, the state government could prosecute NBFCs under Prize Chits and Money Circulation (Banning) Act, 1978, and provisions of the Indian Penal Code, which had a maximum punishment of three years, making the offences bailable.
However, the proposed legislation provides for imprisonment of up to 10 years.