A flourishing world of crime worse than drug trade

More headaches await the next SEBI chief from March 1

Palazhi Ashok Kumar MUMBAI

A criminal market network is operating in Mumbai, and millions of rupees are being stolen from investors every day, sources on condition of anonymity revealed. Investigators coin this network as ‘Scam Dalal Street Inc’, a spiraling world of crime worse than the staggeringly fetid drug trade. 

“This network has been operating from neighbouring states and countries for months with a group of loyal agents in the city. The scammers are not who you think they are. Investors lost buckets of billions in the past three decades from the primary and the secondary markets.

This misfortune has been attributed to negligence of bad and greedy promoters, unrealistic projects and profitability projections, unjustifiable speculation, unconditional fund raising platforms, bureaucratic bottlenecks and loopholes, if any, and lack of qualitative and prudent market analysis and evaluation,” sources revealed the mysteries around scammers on Dalal Street. 

In fact, more headaches await the next SEBI chief from March 1. The market regulator is expected to unearth more bad surprises in the immediate future as several individuals and institutions are still under SEBI’s microscope.  

“It appears that there are several factors here that potentially demand for establishing a joint advisory committee made up of Finance Ministry, RBI and SEBI to ensure a healthy capital market. The IPO market is expected to raise over Rs 2 lakh crore in the next two years, as several companies are awaiting the market regulator’s approval,” a group of investors opined.

Over the years, investment in capital markets, have emerged as one of the fastest-growing asset classes in the business world, and vice versa. Several individuals and institutions, sources said, are already under Sebi’s microscope as this internet-savvy scandalous group attracts people from all walks of life in large numbers, including students.

Before you collaborate with scam bosses, you must do a thorough study on the proposed investment decision. The recent social media push at undesirable levels has also triggered online scams, including online loan and debt-factoring groups. What will happen to those high-flying influencers and half-baked market advisors who recently conquered the ignorant minds of social media addicts? It’s a million dollar-question. However, SEBI is striving hard to take prudent actions against scammers. 

The regulator had unearthed several cases in the recent past, including an interim order on the unexpected market influencer based on a complaint received from a group of 42 complainants. The independent examination into the activities of the influencer started from 2019, and continued until October 2023. It took almost four years for the investigation team to take a final decision.

Meanwhile, eyeing the proposed increase in the FDI investment limit for insurance sector—from 74 per cent to 100 per cent, sources said, a foreign insurance company, in collaboration with a billionaire Non-Resident Indian investor, is in the process of entering the Indian market, and launch two exclusive insurance policies on stock market investments and large bank deposits (from Rs 10 lakhs) of high-net worth individuals and institutions, named, “Fortune Bonds”, and for the potential insurer, sky is the limit for fixing the amount of insurance premium. 

An investor has to go through a stringent screening process to buy a policy from this potential insurance firm (which is under formation), and is currently exploring necessary regulatory requirements from the central government. The concept of ‘Fortune bonds’ if materialises, will create a revolution in India’s capital markets and the insurance sector.

Savings deposits are protected to a certain extend across India despite the recent cyber-attacks and online money scandals, but stock market investments have no insurance of any kind until today except the series of measure that the market regulator has been executing from time to time to safeguard the interest of the investors.