The investigation concluded that the group was using collections from new investors to make payments to the previously-enrolled members, rather than from income generated through investments, in typical resemblance to a ponzi scheme.
Among others, the activities of these companies were found to be in serious violations of the Companies Act, the Sebi Act, and several provisions of the Indian Penal Code, the Corporate Affairs Ministry said in a statement on completion of the SFIO probe.
The Ministry said those companies which have been found to have violated the Sebi regulations for 'collective investment schemes' would be prosecuted for violation of Sebi Act, instead of the Companies Act, as the former carried longer terms of imprisonment.
Besides, prosecution would also be initiated by the state governments for violations of the Prize Chits and Money Circulation Scheme (Banning) Act, while the probe report and necessary evidence would be shared with CBI to avoid duplication in prosecutions.
The scam, wherein lakhs of investors in West Bengal and neighbouring states were defrauded of thousands of crores through illegal money pooling activities, came to light early last year and has also had its political ramifications. The case has also become a political hot potato with Mamata Banerjee-led West Bengal government facing flak from various quarters.
"The companies, their promoters, directors and managerial personnel have been found guilty on many counts of various provisions of the Companies Act... dealing with illegal collection of deposits and false statements, etc", it said.