22 August 2004	Sunday	05 Rajab 1425

MULTAN: Falling interest rates against savings at scheduled commercial banks and saving centres have given birth to the mushroom growth of illegal finance companies that are swindling the people by offering mind-boggling gains.

People with small savings and little or no knowledge of how to make the safe use of their money are falling prey to the swindlers. The swindlers usually charm the savings through alluring slogans like 'where dreams come true' or 'only solution to your financial problems'.

Some of them even claim to have connection with Chinese firms. Initially, regular briefing sessions for the investors are held to tell them how their savings will be multiplied as they may bring more and more people to become member of what the swindlers claim 'welfare schemes'. In this way, the investors become workforce of the scheme in the hope that their hundreds will soon become thousands and then millions.

Initially, some people started operating from the slums, promising to change lot of the dwellers. But, when the people of such areas lost faith in such schemes after being repeatedly hoodwinked by the swindlers, the charlatans now have started encamping in the well-to-do areas. The fake firms may not necessarily run by the same persons, although they always have the same goal to deprive the people of their hard-earned money.

Apathetic is the attitude of the government agencies in this regard as they only come into action when the damage has been caused by the swindlers. In one such scam a so-called welfare scheme named 'madad committee', according to a careful estimate, deprived the people here of (believe it) Rs220 million.

A low-grade PTCL employee, Tahir Sharif, with a knack for mathematics introduced the committee in the middle of 2002 and put on sale its 'shares' for Rs300 each, promising a monthly interest of 45 per cent.

Initially, the residents of his Liaquatabad Colony invested in the scheme and when the people from other localities learnt about the unbelievable interest rate they also started purchasing the shares, despite the fact that Tahir had no business or industry to invest in the people's money.

In short, the committee became an instant success and even BBC radio aired a report that how a person was fetching money in his office located in the slums of Multan city only by offering implausible interest rate. The report, however, further boosted the committee business as people from all over the country rushed to earn the 'incredible' profit. Consequently, Tahir had to set up nine booths at his office to receive investors' money in the morning and disburse profits to the account-holders in theevening.

When a crackdown was finally carried out after several months of the inception of the committee, an amount of Rs90 million was lying on the cash counters of the office, while several millions were recovered from the toilet, empty water tank and other such corners. However, officials of the law enforcement agencies allegedly siphoned off several millions of rupees after recording less recovery.

That were the days of bedlam in the area, which was later pacified after making partial payments to the investors from their principal amount. Tahir is currently facing charges of fraud in the prison, while the police officials who made fast bucks of the scam have been acquitted of any charge through departmental inquiries.

When the scam was hitting headlines, State Bank Governor Dr Ishrat Hussain paid a visit to the Multan Chamber of Commerce and Industry. When his attention was drawn to the 'madad' committee scam, he absolved the central bank of any responsibility to check such illegal banking, saying "it was the greed of the people that deprived them of their money" and added "the State Bank can not go into streets to check swindlers."