Now it’s very common in news papers Money Frauds, Loan defaults by Big investors , ATM frauds , Duplicate credit cards frauds etc , even after so much awareness still there are cases reported often.
This article is about case between PACL and SEBI. PACL collected money from public that promising higher returns but failed to deliver the commitments.
PACL
versus
SEBI
About the PACL
PACL Limited was incorporated on 13th February 1996 with the registrar of companies, Jaipur, The PACL is popularly known with its brand name ”Pearls” . An Real Estate Development Company with Multi-dimensional portfolio ranging from commercial to retail and residential segments. The company is also engaged in sale and purchase of agricultural land and supported with huge land bank.
PACL raised money from the public in the name of agriculture and real estate business. As per the case they have collected More than 49000 Cr from 5.5 Cr Investors.
PACL Appointed more than 70 lakhs Agents across India, & opened up offices in TIER 1, TIER 2 cities.
Agents were appointed from local areas and also they were provided fair amount of Commission, as local people collected money people trusted and deposited their hard earned money.
PACL bought lots of lands in India as well as in abroad, but it was reported later that most of the properties were not registered in the company name.
PACL and Pearls Golden Forest Limited (PGFL) illegally raised money from the poor on the pretext of sale and development of agriculture land. The company managed to tout false allotments of land to investors.
Case Details:
In 1997 SEBI found that, PACL Running a Collective Investment Scheme (CIS) without SEBI’s permission.
The Rajasthan High Court on 28 November 2003, held that PACL’s schemes were not CIS as defined under Section 11AA of the SEBI Act. The HC also quashed SEBI’s letters issued to PACL. SEBI filed an appeal before the Supreme Court against the order of Rajasthan HC.
The SC on 25 February 2013, while allowing the appeal upheld the constitutional validity of CIS Regulations, and directed SEBI to investigate the matter and take appropriate actions In August 2014, the SEBI ordered PACL to refund the money to their investors within a span of 3 months. To this, the company went to Securities Appellate Tribunal (SAT) against the Board.
In 2015, SAT supported SEBI’s order. However, government inaction along with strong political connection, the money failed to be delivered. On 2nd February 2016, Supreme Court ordered to auction company’s properties and refunds the money to the investors.
In 2016, SEBI started recovery proceedings against PACL and its promoters and directors for the failure to refund Rs 49,100 crore to investors. In 2018, Lodha panel shortlisted four firms to sell off the company. PACL also proposed a plan to sell off assets that could recover Rs 15,000 crore.
Lodha committee also found that there were properties in Australia, Also SEBI has filed case in Australian Court, finally court also accepted SEBI to entitled to receive sale proceeds of assets acquired by PACL Australia
Now the committee started giving money back to the investors , But investors not sure about that they will get entire money , Also they don’t know the time frame to get it back ..??.
Our Money Laundering Prevention Act is effective ?..
Reference :
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https://www.moneycontrol.com/news/india/pacl-case-australian-courts-accept-sebi-claim-seeking-repatriation-of-funds-on-investors-behalf-2959201.html
https://timesofindia.indiatimes.com/business/india-business/pacl-case-ed-files-charge-sheet-in-delhi-court/articleshow/65787204.cms
https://www.moneylife.in/article/pacl-scam-ed-files-chargesheet-in-the-rs49100-crore-fraud/55277.html
Business Management 