In the last few years, scores of companies indulging in MLM and MCS have mushroomed under the cover of land development, sale of health products, e-magazines, consumer durables and even 'watching and grading' of advertisements.
It is estimated that more than 10 million gullible people are affected by MLM and MCS in the country and these businesses have inter-state ramifications, according to Additional Director General of Andhra Pradesh's Crime Investigation Department S V Ramana Murthy.
The issue was discussed at length at the two-day conference of the chiefs of CIDs of southern state here last week, wherein it was agreed to devise a mechanism to deal effectively with MLM and MCS cases.
The states have also agreed to make suitable amendments to the laws to deal with these white-collar crimes.
The issue of "vanishing companies", as complained by the Registrar of Companies, was also discussed.
"Tackling such fly-by night operators has been a major problem for the Ministry of Corporate Affairs, the Securities and Exchange Board of India and the police.
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Across the country, directors/promoters of many companies which never undertook any economic activity were able to make good money by cheating the investors through manipulative tactics by floating Initial Public Offers, collecting crores of rupees and misappropriating the same.
It was decided to initiate action against promoters and directors of such companies under the Indian Penal Code," Murthy said. (MORE)