The Security and Exchange Commission of Pakistan (SECP) declared that the registration of a company with the SECP does not allow it to collect illegal deposits and launch fraudulent schemes that offer guaranteed returns on investments under the pretext of investing in real estate schemes.
As per the report published in DAWN, the SECP has received multiple complaints from the public, especially senior citizens, who have lost their savings by investing in some fake real estate schemes.
In a statement, the SECP stated that these real estate investment schemes usually solicit investment from the public by promising huge profits.
The people responsible for these schemes deceive and trap investors by showing the National Tax Number of the Federal Board of Revenue (FBR) and the incorporation certificate of companies registered with the SECP.
Fraudsters collect deposits from hundreds of individuals as investments in real estate projects, which are sold by promising unrealistic monthly returns.
The funds are usually deposited in bank accounts of unregulated entities controlled by the fraudsters, while the companies are presented as legal structures to attract investment.
These real estate schemes operate as Ponzi schemes, which pay dividends to early investors before disappearing and depriving other investors of their hard-earned money, and there is no legal avenue for recovering the funds from them.
The SECP advised the public to exercise extreme caution, and not invest in bogus real estate schemes based solely on lucrative monthly return payments.
The SECP further clarified that it does not regulate real estate investment schemes other than real estate investment trusts.
The SECP said that any suspicious investment activity in real estate should be reported immediately to law enforcement agencies.
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