A section of members of parliament have renewed their call to Government to freeze the accounts of the promoters of Ponzi and Pyramid schemes which promise high returns with little or no investment to people to defraud them .
In February this year Parliament asked the Prime Minister DR Ruhakana Rugunda to investigate the matter and report to parliament and action be taken against Ponzi and Pyramid owners who are robbing Ugandans of their money.
However, addressing a news conference at parliament MPs including Mwine Mpaka the youth representative from western Uganda ,Kigulu south MP Andrew Kaluya and Kasambya county MP Gafa Mbwatekamwa blamed government for delaying a report to parliament to stop this business which they claim is not properly regulated.
The youth mp Mwine Mpaka explains that parliament passed a resolution for government to freeze the accounts of the individuals operating Pyramid schemes and money taken to consolidated fund but to date nothings is being done.
" In February this year, the speaker asked him to present this report before the closure of this session.Should this report come and there is no action taken, we shall not only know that the executive is facilitating the existence of these Ponzi and pyramid schemes but also protecting these ponzi schemes as alleged by the public." Mpaka said
The legislator noted that some of the individuals operating Pyramid schemes abandoned their original schemes and created new ones with intent to continue exploiting unknowing Ugandans.
He also alleges that some people who lost their money with one company whose account was frozen in 2017 have never been compensated by the ministry of finance.
" we also have information that in June 2017, they froze the account of one smart Protus magara and this 2million US dollars, we do not know whether the ministry of finance actually fixed it or it went to the consolidated fund, because this money was meant to go back to the people who lost their hard earned money but up to now they have never been compensated". Said Mpaka
Mp Mbwatekamwa say that Government should first close all these Ponzi and pyramid companies as parliament resolved and then have them return all the money ,they have collected from Ugandans.
The central bank in 2017 cautioned the public against investing in Ponzi schemes, saying the scheme is a fraudulent investing scam promising high rates of return with little risk to investors.
According to bank of Uganda, Money invested by clients in this scheme
is not invested in any legitimate business but used to pay the people
operating the scheme as well as those who invested earlier on.
BOU further note that is why Ponzi schemes can sometimes appear to be
genuine and profitable investments; because the people who invested
first seem to be benefitting.
According to the central bank, the pyramid scheme is similar to a
Ponzi scheme but, like the name “pyramid” suggests, it is based on a
hierarchy whereby new investors are the bottom of the pyramid.
Under this scheme, the income the people provide by paying membership
fees or an initial investment is used to pay original investors.
Bank of Uganda further clarifies that pyramid and ponzi schemes, do
not sell products or make real investments but they simply rely on
money from new investors which is channeled to those at the top of the
pyramid.