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Duped PACL Investors Receive A little Respite

by Raju Vernekar
0 comment 5 minutes read

By Raju Vernekar
Mumbai, Mar 18:

The Justice (Retd.) R. M. Lodha Committee has given one more opportunity to the duped investors of PACL, whose claims were earlier rejected due to deficiencies, to register their claims for refund of the amount up to Rs 10,000, till March 31, 2021. 
The Committee which communicated to the investors vide notice dated December 16, 2020, is awaiting the response from the investors. The Lodha Committee has been appointed by the Supreme Court to supervise the process of selling assets of ”Pearls Agrotech Corporation Limited (PACL) and refund money of the investors across India, duped in an Rs. 49,100 crore scam. 
The Lodha Committee was appointed on February 02, 2016, by the Supreme Court to supervise the process of selling assets of ”Pearls Agrotech Corporation Limited (PACL) and refund money to investors across India. Besides, the Justice (Retd) Vikramjit Sen committee was appointed for the supervision of refund of money to the investors of the Pearls Golden Forest Ltd (PGFL). There are an estimated 5.85 core investors duped in an Rs. 49,100 crore scam by these companies. 
After it began the process, the Lodha Committee received around 1.5 crore claims. Of these and till now it has refunded Rs 434.9 crore to 12.63 lakh applicants. At present the claims of investors up to Rs. 10,000 are being processed for effecting refund. 
PACL and PGFL cheated the investors under the pretext of sale and developing of agricultural land which they never owned. These companies were incorporated on February 13, 1996, with the registrar of companies, Jaipur (Rajasthan) under Companies Act 1956 with their Registered Office in Jaipur and corporate office in New Delhi. 
They came under the scanner of the Securities and Exchange Board of India(SEBI) in 1999, which directed them to comply with the provisions of the collective investment scheme (CIS) regulations. However, these companies challenged SEBI’s order in the Rajasthan High Court. After lengthy legal litigation, in 2014, the SEBI attached bank accounts and mutual fund portfolios of PACL and its eight directors for its failure to comply with its order to wind up the schemes and refund nearly Rs 49,100 crore to the investors within three months. Subsequently, the CBI and Enforcement Directorate (ED) filed cases against the company and its directors. 
In the Ponzi scheme floated by Nirmal Singh Bhangoo and his colleagues. PACL not only roped in Australian cricketer Brett Lee as its brand ambassador but also invested millions of dollars in Australia in 2010, through shell companies. They had also started a TV channel –P7.   
The accused released on bail
Nirmal Singh Bhangoo and his colleagues were arrested by CBI in 2016. Subsequently, Bhangoo, Kanwaljit Singh Toor, Mohan Lal Sehjpal, Gurmeet Singh, and Sarvesh Kumar were granted bail upon furnishing a personal bond for Rs one lakh and one surety each. The bail was granted by Judge Dig Vinay Singh of Special CBI Court, New Delhi on September 03, 2020(Order No. ECIR/03/DLZO/2016 P.S CBI CT. Case No. 09/2019). 
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 had teamed up with Australian property developers- “Paul Brinsmead” and “Peter Madrers”, operating “Resort Corp”, which was engaged in developing large tracts of coastal land in the Tweed Shire in northern New South Wales (NSW). However, the group of 14 companies collapsed in March 2009. Later they founded “Pearls Australasia”. In September 2014, the name of “Pearls Australasia” was changed to “MiiGroup Holdings”. 
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. It sought repatriation of the assets or the proceeds thereof. In response, the court on July 23, 2018, accepted SEBI’s claim. Subsequently, the Lodha Committee received Rs. 3,69,20,34,883.00 from the Federal Court of Australia on June 03, 2020, for effecting refund to investors. 
Recovery process
The Lodha Committee attached the bank/ Demat accounts of 640 associate companies of PACL. Of 27500 properties of PACL, the Committee could sell 113 properties (although the auction process was completed for 872 properties), by way of auction and generated Rs. 89 Crore. The Committee realized Rs. 14.64 crore, by auction of 75 vehicles through e-auction conducted on the platform provided by MSTC Ltd, a Government of India Enterprise. The Committee also realized from PACL and its Associates Rs. 98.45 crores from FDRs and Rs.308.04 crore lying in their bank accounts. It also received an amount of Rs.52,77,597/- from the Collector Land Acquisition, Punjab, as compensation towards to acquisition of properties of PACL. 
The Committee submitted a report dated November 14, 2019, to the Supreme Court with a recommendation to sell properties of PACL worth Rs.2,000 crore through two Asset Reconstruction Companies (ARCs) viz. ARCIL and Prudent ARC. At present, the Committee awaits the orders of the Supreme Court on the report and various other applications. 
However, the PACL Investors’ Grievances Committee has criticized the slow process of the committee since it has been able to refund only Rs 434.90 crore to 12.63 lakh applicants while the number of those seeking refund is over 1.50 crore. The Janhit Association Secretary and PACL Investors’ Grievances Committee convenor Vishal Mhetre said that although over 27,000 properties are due for action, the Committee has been able to sell only 113 properties and as such it should expedite the process of the sale of properties spread across India.

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