SECP bans two more companies running illegal investment schemes - SAMAA

Reporting by Wakil-ur-Rehman

The Securities and Exchange Commission of Pakistan or SECP banned on Friday two more companies for running illegal schemes, duping the public into investing in illegal business ventures.

The companies that were banned are International Business Solutions and Top Notch World Technology.

People have been warned against falling for similar monetary traps.

B4U Global and SR Global had already been banned by the SECP.

According to a media release by the SECP, these companies were running investment schemes and collecting funds illegally without holding any license for doing so.

"Just getting a company registered with SECP does not necessarily mean it can collect public money for investment schemes," the SECp press release stated.

According to Section 301 of the Companies Act of 2017, collecting money for using it in referral marketing, MML, Pyramid and Ponzi schemes is illegal.

All these schemes take money from new investors and pay high dividends to older investors besides offering risk-free investment opportunities. Other schemes, including Ponzi, new investors are lured to invest.

Social media pages of one of these companies, International Solutions (Pvt) Limited offered investment opportunities in "real estate, import and export, and oil and gas", promising investors profits ranging between 20% and 25% against bank guarantees.

Interestingly, this company's web page was designed on October 26 with an Islamabad address.

When SAMAA Digital contacted the company on phone numbers provided on its web page, he was treated as a potential customer and told that investment "of no less than Rs10 million and provides a bank guarantee after receiving a pay order for the amount paid by the customer".

The representative of the company also told this correspondent that the company did not pay dividends on a monthly basis but paid profits on a yearly or biannual basis.

When the company's representative was asked why this information was not included on the web page, he said that there was no need for it. "We invest on behalf of other companies too and act as a bridge between companies and investors in this regard."

Meanwhile, Top-Notch World Technology offered three modes of investment, including water shop, franchise and partnership.

In 'Water Shop' mode, investors can invest in setting up water plants costing Rs1.5 million.

An investor can invest as much as Rs2.5 million to acquire the company's franchise "worth Rs3 and Rs3.5 million.

"If the investors just want to earn money, they can earn as much as Rs2,000 to Rs2,800 a month on every investment of Rs20,000 or more while investments of Rs1 million can earn as much as Rs100,000 to Rs140,000 per month." This translates to a profit earning of Rs1.2 million on every million rupees. This company is supposedly based in Lahore.

The company stated that if the investors withdrew their money in six months or less, they would get 30% less on their investment. After six months, investors can take their money out after serving a one-month notice.

An investor, a company representative told SAMAA Digital, was provided a unique ID and provided details of the money invested and profit earned on the investment. The profit, he said, could be withdrawn twice in a month and if the company suffered losses investors would get back their original investment without any profit.

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According to him, the company had recently installed its own water plant on the Ferozepur Road in Lahore where other types of equipment is also manufactured and investors "are asked to invest in these ventures".

When asked about long-distance investment, say from Karachi, the company's representative said that if "you trust us, you can simply send the money online and earn profits twice a month or you can come to Lahore and invest and enjoy your profits sitting at home."