The Securities and Exchange Commission of Pakistan (SECP) has reiterated that company registration with the regulator does not authorise firms to collect public deposits, offer guaranteed returns, or run fraudulent investment schemes under the guise of real estate projects. The commission has received multiple complaints, particularly from senior citizens, who lost their savings to such schemes.
In a statement, the SECP said these real estate investment schemes attract the public by promising high returns. Fraudsters mislead investors by displaying Federal Board of Revenue (FBR) national tax numbers and SECP incorporation certificates to create an impression of legitimacy.
These schemes collect deposits from hundreds of individuals, claiming the funds will be invested in real estate projects while offering unrealistic monthly returns. The money is often deposited into bank accounts of unregistered entities controlled by the perpetrators, while registered companies are used as a front to lure investors.
According to SECP, such operations function as Ponzi schemes, where early investors receive returns before the system collapses, leaving later investors with no legal recourse. The commission clarified that it does not regulate real estate investment schemes, except for Real Estate Investment Trusts (REITs).
SECP urged the public to be cautious and avoid investing in such schemes based solely on promised monthly profits. It also advised reporting any suspicious real estate investment activity to law enforcement agencies.
