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A glimmer of hope to crores of duped investors

By - Raju Vernekar

Over 6 crore investors Pan India, duped in a Rs. 49,100 crore scam of the “Pearls Agrotech Corporation Limited (PACL)”, can have a glimmer of hope of getting their money back, with Indo-UK Institutes of Health (IUIH), volunteering to purchase some of the seized properties of PACL to set up “medicities” in different states in India.
 
In a letter dated 28 January 2019 addressed to the Justice (retd) R M Lodha Committee (set up by the Supreme Court of India to supervise the process of selling PACL’s assets and refund investors’ money), the IUIH has stated that it would like to acquire 11 parcels of land to set up medicities in India and as such necessary permission be given.
Similarly, while hearing a civil appeal (No 13301/2015) filed by Subrata Bhattacharya against Securities and Exchange Board of India (SEBI), a division bench comprising Dr. Justice D Y Chandrachud and Justice Indira Banerjee at the Supreme Court, has taken a note of the statement of the Lodha Committee that it has received ‘suo motu proposals/expressions of interest from IUIH for acquisition of land. The Committee by public notice dated 19 August  2019 had also invited proposals from other parties, who were asked to submit the proposals till 16 September 2019. However as of now the IUIH is the only company who has offered to purchase the PACL’s land.
“We leave it open to the Committee to receive any further offers and to explore them after duly publishing a notice on the website. We authorize the Committee to explore whether a substantive outcome can be achieved. The Committee will keep this court apprised of further developments before taking a final decision”, the bench added.
The IUIH program is a joint effort of the U.K. and Indian Governments for the creation of Medicities in different parts of India. A task force has already been constituted under the chairmanship of the Secretary, Union Department of Health and Family Welfare for setting up 11 institutes across India. The agreement about this 10-year long project was signed between Indian Prime Minister Narendra Modi and former British Prime Minister David Cameron in November 2015.
IUIH is a 100 per cent Indian subsidiary of UK Global Healthcare Ltd (UGHL), which is in partnership with Bin Zayed Bin Zayed Group( Bin Zayed International LLC and Bin Zayed Asia LLC). It has offered to acquire land in the name of “Indo UK Healthcare Pvt Ltd”. The funds will be transferred from UGHL into Indo UK-Healthcare Pvt Ltd as Foreign Direct Investment (FDI).
Up till now the IUIH has acquired 151.4 acre land in Nagpur(Maharashtra) and 150 acre land in Amravati( Andhra Pradesh). It has also identified following land parcels: Delhi-West Delhi district, near Mundka metro station-151.60 acre, Maharashtra-Pune SUS area-455.56 acre, Karnataka-Bengalore-Devanhalli-535.77 acre, Haryana-Gurugram-Farukh Nagar-308.90 acre, Gujarat-Vadodara-Tehsil Dabhoi-126.47 acre, Goa-100.84 acre, Uttar Pradesh-Lucknow-Mohanlal Ganj-284.62 acre, Kerala-Ernakulam-267 acre, Punjab-Ludhiana (Banohar and Hassanpur)-91 acre, Ludhiana-near Sahnewal airport-441 acre, Mohalli-(sector 114 and 115)-30 acre, tehsil Dera Bassi, village Chhat-105 acre, Tamil Nadu,Madurai-75.995 acre and Mumbai, Maharashtra-Vasai 300 acre. Besides, it has also signed MOUs with Maharashtra, AP, MP, Assam, Punjab, Gujarat, Telangana, Haryana, Karnataka, Uttar Pradesh and Uttarakhand Governments.
PACL and Pearls Golden Forest Ltd (PGFL), are being accused of cheating over 6 crore investors on the pretext of sale and development of agriculture land. They made false allotments of land to investors, although they never owned them. PACL promised the investors that the land would be allotted to them within 90 to 270 days and if not, handsome return on their investment will be given. PACL was incorporated on 13 February 1996 with the registrar of companies, Jaipur, under Companies Act 1956 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 to PACL directing it to comply with the provisions of the collective investment scheme (CIS) regulations. However PACL challenged SEBI’s letters in the Rajasthan High Court, 1999, claiming that its scheme does not fall under the definition of CIS as defined under the CIS Regulation and SEBI Act. In response, the Rajasthan High Court on 28 November 2003, ruled that PACL’s schemes were not CIS as defined under Section 11AA of the SEBI Act and quashed SEBI’s letters issued to PACL. Then SEBI appealed in the SC against the order of Rajasthan HC. The SC on 25 February 2013, upheld the constitutional validity of CIS Regulations, and directed SEBI to investigate the matter and take appropriate action. 
The ponzy scheme was allegedly floated by Nirmal Singh Bhangoo and his three colleagues. 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 first 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, before approaching the Indian government. 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.
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.
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. 
Bhangoo and his family members reportedly teamed up with property developers- Paul Brinsmead and Peter Madrers of “Gold Coast property developers”. They were operating the company “Resort Corp”, engaged in developing large tracts of coastal land in the Tweed Shire in northern New South Wales (NSW) before its group of 14 companies collapsed in March 2009.. Six months later, Brinsmead and Madrers founded “Pearls Australasia” with Bhangoo, his son Harvinder Singh Bhangoo and son-in-law Gurpartap Singh. Later Bhangoo’s other daughter Barinder Kaur and her husband, Harsatinder Singh Hayer, also joined the company as directors.
In September 2014, “Pearls Australasia” changed its name to “MiiGroup Holdings” and referred  itself  as the “MiiGroup of companies”. These companies were based in a waterfront office at Bundall on the Gold Coast. “Shac Communications”, a public relations company also functioned from the same address. Simone Holzapfel, chief political adviser to former Australian PM Tony Abbott, was stated to be the MD of the “Shac Communications”.  However lately “MiiGroup”, distanced itself from the PACL scam.
In 2018, SEBI filed a claim petition in the Federal Court of Australia 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. The Federal Court passed order on July 23, 2018  accepting the claim petition filed by SEBI.
However although SEBI has 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.
The details of PACL’s  properties (worth  Rs 1000 crore and above) are: East Zone-
Assam (01 property), Bihar( 33 properties), Chattisgarh(104), Jharkhand (01), Odisha (546),West Bengal(905)=1590. North Zone-Chandigarh(5), Delhi (373), Haryana(769), Himachal Pradesh(11), Punjab(2405),Uttar Pradesh(428), Uttarakhand (368)=4359. South Zone-Andhra Pradesh(612), Karnatak(1090), Kerala(04), Tamil Nadu(10284) Telengana(973)=12963. West Zone- Goa(24), Gujarat(188), Madhya Pradesh(4498),  Maharashtra(1449), Rajasthan(3903)=10,062. Total number of properties-28974
The Lodha Committee which received claim applications numbering 12169196 aggregating Rs. 24235.45 crore till 5 May 2019, extended the deadline to 31 July 2019 to enable investors to lodge their claims. The claims up to Rs.5000 are currently being processed for effecting refund.

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