Mumbai, Feb 9
Based on Supreme Court(SC)’s directions, the Justice (retd.) R.M. Lodha Committee (JRMLC) has offered 27,133 sealed properties of the defunct “Pearls Agrotech Corporation Limited (PACL)”, across the country, rekindling hopes of over 6 investors duped in a Rs. 49,100 crore scam, to get back their money.
The bids have been invited for the sale of 27,133 properties by the JRMLC by the public notice issued on 6 February, from interested parties, including Non-banking financial companies (NBFC), Asset Reconstruction Companies (ARC) and 12 bidders referred by SC in its order dated 23 January 2020. The above directions were given, in response to a civil appeal (No. 13301/2015 in the matter of Subrata Bhattacharya Vs. Securities and Exchange Board of India (SEBI).
The properties offered for sale zone wise are: East Zone-Assam 1, Bihar 33, Chhatisgarh 98, Jharkhand 1, Odisha 546, West Bengal 905= East Zone Sub-Total 1,584. North Zone-Chandigarh 5, Delhi 362, Haryana 682, Himachal Pradesh 11, Punjab 1,765, Uttar Pradesh 371, Uttarakhand 3, North Zone Sub=Total 3,199. South Zone-Andhra Pradesh 612, Karnataka 873, Kerala 2, Tamil Nadu 10,110, Telangana-972, South Zone sub total=12569 and West Zone-Goa 20, Gujarat 186, Madhya Pradesh 4,390, Maharashtra 1,324, Rajasthan 3,861, South Zone Sub-Total 9,781.
The bidders shall have minimum net worth of Rs.50 crore in each of the immediately preceding 3 years. They will have to pay the Earnest Money Deposit (EMD) of Rs. 150 crore by DD to SEBI payable at Mumbai and will have to submit audited balance sheets for the immediately preceding 3 years. They should not have been barred under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, The Prevention of Money Laundering Act, 2002 or any other law, from participating in the sale process. They can submit offers covering all or any of the 27,133 properties, with aggregate value of at least Rs.1,000 crore.
The offers will be received till 25 February 2020 at SEBI’s office located at BKC, Bandra in North West Mumbai. The counter offers will be accepted till 2 March. After uploading counter offers, the original bidders will be given chance to upload matching offers on SEBI’s website till March 11,2020.
Over 6 crore investors were cheated by PACL and Pearls Golden Forest Ltd (PGFL), floated by Nirmal Singh Bhangoo and his three colleagues by giving them false promise to give agriculture land within 90 to 270 days and if not, handsome return on their investment. They had also made fake allotments of land, although they never owned them.
PACL was incorporated on 13 February 1996 with the registrar of companies, Jaipur, having its Registered Office in Jaipur and corporate office in New Delhi. The mobilisation of funds by PACL dates back to the year 1997, when based on a complaint, SEBI on 30 November 1999 and 10 December 1999, issued letters directing PACL to comply with the provisions of the collective investment scheme (CIS) regulations. However in response to PACL’s petition, the Rajasthan High Court on 28 November 2003, quashed SEBI’s order and ruled that PACL’s schemes were not CIS as defined under Section 11AA of the SEBI Act. In response to SEBI’s appeal, the SC quashed the Rajasthan HC order and on 25 February 2013, upheld the constitutional validity of CIS Regulations, and directed SEBI to investigate the matter and take appropriate action.
In 2014, SEBI attached all bank, demat accounts and mutual fund portfolios of PACL and its eight directors and promoters, for its failure to comply with its order dated 22 August 2014 directing it to wind up the schemes and refund Rs 49,100 crore to the investors within three months from the date of the order. PACL filed an appeal before the Securities Appellate Tribunal (SAT), which was dismissed on 12 August 2015.
PACL not only roped in Australian cricketer Brett Lee as its brand ambassador, but also reportedly invested millions of dollars in Australia in 2010, through shell companies. This was reflected in the charge sheet filed before the “Tis Hajari Court” in Delhi. The details of money invested in Australia by Bhangoo, were provided by investors.. Vishal Mhetre , Mrs Nanda Jagtap and others, in the Federal court of Australia(FCA).
Subsequently, the Central Bureau of Investigation(CBI) registered a case against PACL and based on the CBI complaint, the Enforcement Directorate (ED) lodged an first information report (FIR) in 2015. Bhangoo and his three colleagues were arrested by CBI in 2016. In September 2018, the ED filed a charge-sheet against PACL and attached Australia-based assets of the Pearls Group worth Rs.472 crore.
In 2018, SEBI filed a claim petition in FCA to recover dues worth Rs 4 billion stashed away by the PACL using several shell entities. SEBI sought repatriation of the assets or the proceeds thereof. FCA passed order on July 23, 2018 accepting the claim petition filed by SEBI. The SEBI was able to free the sale amount in Australian federal court with the help of Indian advocates Anand Bhagat and Manoj Nayak through investigator Naill Corbun who investigated the case for Indian Investors in Australia.
However although SEBI began process of auctioning PACL’s property, till now it has been able to recover hardly Rs. 86.20 crore by selling 113 properties, at the conclusion of the second auction process.