Stringent measures essential to curb pyramid schemes

Channa Kasturisinghe

SWINDLING: The Economic Advisor to the President and the Secretary of the Ministry of Plan implementation Ajith Nivard Cabraal yesterday stressed the need for taking stringent measures by relevant authorities to prevent the spread of rackets such as pyramid schemes in Sri Lanka.

He told the Daily News that companies which introduce such schemes attempt to exploit the people who want to make quick money and therefore making the public aware of such malpractices by institutions such as the Central Bank is of utmost importance.

"In fact way back in 2004, I emphasised in the media the need for the Central Bank to make the public aware of such schemes. However, relevant authorities also should take necessary precautions.

For example, if a company like Gold Quest invests in the companies listed in the Colombo Stock Exchange the relevant authorities should find out where that money comes from." Cabraal said.

He also said that the internet and credit cards has become a breeding ground for such rackets and therefore the legal framework should be strengthened as far as these areas are concerned.

"It is also important that there are specialised people at relevant places to deal with such activities," Cabraal said.

The Central Bank earlier announced that the Government is in the process of introducing specific legislation to ban pyramid schemes.

However, operators of pyramid schemes are still active in Sri Lanka and recently some Sri Lankans engaged in this racket were arrested by the police.