PACL not only roped in Brett Lee as its brand ambassador, but also invested millions of dollars in Australia. Also, the Ponzi company's directors, including promoter Bhangoo's daughter and son-in-law, were seen living in lavish properties in Australia
PACL Ltd, formerly known as Pearl Agrotech, which has been asked to repay about Rs55,000 crore by the regulators, not only used services of cricketer Brett Lee as its brand ambassador, but also invested millions of dollars in Australia, reveals a report from The Australian.
Pearls promised generous returns to investors by supposedly rehabilitating degraded agricultural land and turning it into prime productive farming country and collected around Rs49,000 crore from investors. "Instead, the money went into the pockets of the directors, who lived lavish lifestyles and bought television stations, Indian cricket teams and invested the money in assets for themselves, including hotels and properties in Australia," the report says.
The Justice RM Lodha Committee appointed by market regulator Securities and Exchange Board of India’s (SEBI) is also looking into investment made by PACL in Australia. The report says, "Their investigations will include the 2009 purchase of the Sheraton Mirage on the Gold Coast. Mr (Nirmal Singh Bhangoo, founder of PACL) Bhangoo spent $62 million buying the resort and $20 million more renovating it. The Sheraton, of course, is Christopher Skase's old haunt."
According to the report, in Australia, Mr Bhangoo and several of his family members teamed up with Gold Coast property developers Paul Brinsmead and Peter Madrers. The two Australians had operated the company Resort Corp, which developed large tracts of coastal land in the Tweed Shire in northern NSW before its group of 14 companies collapsed in March 2009, owing about $300 million, it said.
"Six months later, while administrators were still sorting through the wreckage of Resort Corp, Mr Brinsmead and Mr Madrers founded Pearls Australasia with Mr Bhangoo, his son Harvinder Singh Bhangoo and son-in-law Gurpartap Singh. Later Mr 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 refers to itself collectively as the MiiGroup of companies. These companies are all based in a waterfront office at Bundall on the Gold Coast. Also, operating from the same address is Shac Communications, the public relations firm that represents MiiGroup Holdings and undertook the "full rebrand for the group" in 2014. The managing director and owner of Shac Communications is Simone Holzapfel, who was Tony Abbott's chief political adviser for six years during the Howard government," the report from The Australian says.
MiiGroup, however, has distanced itself from the PACL scam and investigation going on in India. In a statement, it called itself as an Australian company with diverse business with Pearls Infrastructure Projects (PIPL) as a passive investor in some of its businesses. "...the individuals and companies associated with PIPL in India have no control and do not take part in any day-to-day operations of the independent and separately owned Australian MiiGroup. Any allegation that MiiGroup Australia is an Indian company or a subsidiary of an Indian company is false. Any allegation that any events in India are related to individuals or companies associated with PIPL are in any way relevant to or connected with MiiGroup, or that Mii Group is controlled or managed by any of these entities, is false," the statement reads.
In its report, the newspaper said, based on company searches, Mr Bhangoo's daughter Barinder and her husband Mr Hayer, live in a multimillion-dollar Gold Coast mansion. The property in the suburb of Hope Island boasts six bathrooms and five garages and was bought, along with an adjacent vacant block, for $4.95 million in 2011 by a company called Pearls Infrastructure Projects.
Quoting P Venugopal, senior counsel for SEBI, the report said, "I do not think we will ever be able to recover much. Because basically, according to us, the entire operation was just a money laundering exercise. The Central Bureau of Investigation (CBI) is investigating celebrities who were involved with the (Pearls) schemes and yes, (cricketers) Harbhajan Singh and Yuvraj Singh are under investigation with respect to the plots at Mohali (in Punjab) received by them from the company."
In 2010, PACL roped in Australian speedster Brett Lee as its brand ambassador. During a press conference announcing his appointment, Lee had reportedly said, "It's not about only being a brand ambassador, but I am proud to be a family member of Pearls Group. I feel every person is being touched by Pearls around the world. I certainly believe that Pearls is the best."
In the advertising campaign, Lee was filmed building sandcastles with kids and jogging on a beach in Goa. "He stood in front of a camera dressed in a white sports coat and recited the firm's mantra: 'Touching hearts, building confidence. Pearls Infrastructure', the news report says.
"What he should have said was "touching wallets, breaking hearts", for while there is no suggestion that Lee had any knowledge of this at the time, the company he was spiking was allegedly engaged in a monumental fraud," it added.
While Lee's manager at that time, Neil Maxwell, who negotiated the deal with PACL, and current manager, Jake Elder have denied any wrongdoing on part of the cricketer. The fast bowler's website, Brett-Lee.net still lists Pearls India as one of the brands represented by him. It says, "(Lee is) a brand ambassador across the Pearls group, representing Pearls Infrastructure Group, P7 News, Pearls Tourism & Pearls Spices."
SEBI's counsel Venupgopal told the newspaper that officials from the Australasian Consumer Fraud Taskforce, an umbrella body whose members include the Australian Federal Police and the Attorney-General's Department, had recently contacted him to discuss the alleged fraud and its implications in Australia.
He also told the newspaper that directors of PACL used Russian banks to send money (collected from investors) overseas, including Australia and it would be very difficult to follow the trail.
According to the newspaper report, the Australian arm of Pearls was adept at working political connections. In October 2010, as part of a trade mission and Australia's 2018 Commonwealth Games bid, a delegation led by then Queensland premier Anna Bligh and including then high commissioner to India Peter Varghese met with the Pearls Group, it said.
"A record of the meeting shows that in attendance were Pearls Group directors; Mr Bhangoo's other daughter Sukhwinder Singh and her husband Gurpartap Singh; 'group general manager' of Pearls Group Rikhab Jai; and 'Pearls Australia joint managing directors' Mr Brinsmead and Mr Madrers. Records show the meeting was 'designed to encourage the Pearls Group to increase its investment portfolio in Queensland' and Pearls Group was stated as having '1.6 million employees across its various entities'. The records show Ms Bligh directly dealt with requests from members of the Bhangoo family to obtain 'state-sponsored' visas," the report from The Australian says.
Earlier, SEBI, as part of its recovery proceedings, attached all bank and demat accounts, mutual fund portfolios of PACL and it eight directors and promoters. In a release, SEBI said, the recovery proceedings have been initiated for their failure to comply with its order issued on 22 August 2014 directing, PACL and its directors and promoters to wind up the schemes, and refund Rs49,100 crore to the investors within three months from the date of the order. This amount is excluding further interest and all costs, charges and expenses incurred in the recovery proceedings.
According to SEBI, the amount due to investors of PACL would be over Rs55,000 crore. This includes promised returns, further interest, all costs, charges and expenses incurred in respect of all the proceedings taken for recovery of Rs49,100 crore from PACL.
The mobilisation of funds by PACL traces back prior to 1997. Upon receipt of a complaint, SEBI on 30 November 1999 and 10 December 1999 issued letters asking PACL to comply with the provisions of the collective investment scheme (CIS) Regulations.
PACL challenged these letters before the High Court of Rajasthan in December 1999, claiming that its scheme does not fall under the definition of CIS as defined under the CIS Regulation and SEBI Act. PACL also challenged the constitutional validity of the CIS Regulations.
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.
After conducting an inquiry, SEBI on 22 August 2014, issued an order directing PACL, its promoters and directors to wind up all the existing CIS and refund the monies collected by the company to investors as per the terms of offer within a period of 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. The SAT directed PACL and its promoters-directors to refund the money within three months. Since the company and its promoters-directors failed to refund the money to the investors as per the directions of SEBI and SAT, the market regulator said it has initiated the recovery proceedings.
New Delhi : India's Income Tax department has issued refunds of Rs.1 lakh crore in the current fiscal up to January this year, a senior official said on Monday.
"The Income Tax department has so far issued refunds of Rs.1 lakh crore to 1.75 crore assessees in 10 months of the 2015-16 fiscal," Revenue Secretary Hasmukh Adhia said in a tweet.
The government directed the department in December 2015 to quickly settle the refund claims of amounts less than Rs.50,000.
As of November 1, refunds had to be made to 207,000 Income Tax returnees involving Rs.659 crore for the assessment year 2013-14 and another set of 1.29 million returnees involving Rs.4,837 crore for 2014-15.
"This (refund) has been a major relief to taxpayers. This demonstrates the government's intention to create a tax-friendly environment," Adhia said.
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How Mumbai’s local trains and double decker bus shocked a British transport expert
"They run without doors?" was the first reaction of the alarmed Christian Wolmar, British transport expert, rail historian, author, journalist and the 2016 London mayoral candidate when he saw a crowded suburban local train pulling out of Churchgate station in Mumbai on his day-long visit.
Wolmar was in Mumbai as a part of his India tour for his new book on Indian Railways. Fascinated with trains and railways like me, Wolmar, first started as a transport journalist with The Independent and has been writing on transport issues since 1992. The award winning writer and broadcaster is also the author of a series of books on railway history. He was at Churchgate and Mumbai Chhatrapati Shivaji Terminus (CST) and spoke about a host of transport issues.
Earlier on his arrival, one the first photos that he had taken in Mumbai was that of the double-decker bus, calling it a “dishevelled Mumbai double decker with a platform at the back” tagging the Mayor of London, in his tweet. And he was correct as the Mumbai double deckers have been a British legacy and the last 120 buses that remain are diluted versions of the original Routemasters.
As I caught up with him at the Taj, Mumbai, he had bought for me a personally signed copy of the Iron Road, a fascinating account of hidden stories of railway history from the early steam train days to the high-speed bullet trains of today, a book authored by him that I had always wanted. It was quite an honour to get a copy from the person himself and that too a signed one. As the conversation moved to trains and railways, I suggested he should take a look at the city's two biggest rail terminals in Mumbai-- Churchgate and Mumbai CST and he readily agreed.
We hopped into cab (after refusals from a few) and reached Churchgate station. It was a Saturday evening and crowds were thin, but still good enough as there had been a few train delays. After examining the automatic ticket vending machines with the suburban maps on them, we got a platform ticket and entered the platform, walking to the other end as he wanted to take a good look at the trains entering and leaving the station. Technically, a variety of EMU trains were standing next to each other -- a Bombardier class and a Siemens one.
As we walked back after a brief photo session and as the train moved, Christian was alarmed that the train had started moving with open doors. As I explained to him later that the trains here were non-air-conditioned and there were ventilation issues if the doors got shut, he seemed convinced, but said it was a highly risky affair. “You die one way or the other, either by suffocation or via open doors,” said he and was quite stunned to know that about 10 people die on the suburban lines of Mumbai every day. After examining and admiring the functional 1936 British Ransomes and Rapiers heritage buffers on Churchgate platform, we took the pedestrian subway to crossover to the Western Railway headquarters building.
“There is chaos, crowd and people everywhere, but things in India are always at their functional best. This is the best part of the country,” he said as we walked the subway, half of it occupied by hawkers, half of it under repairs.
The next stop was the Churchgate heritage building. Since the offices and the heritage gallery are shut on the weekend, we were not allowed to enter the building premise but Christian was quite impressed by the Bilimora-Waghai (Gujarat) railway’s steam engine on display in the building premise. He took a lot of its pics of it saying, “it’s built in Stafford,” and tweeted one immediately, calling it one for the “grocers”, an informal term for trainspotters or rail fans.
Quite fit for his age, he decided to walk it up from Churchgate to Mumbai CST so that we could discuss more of two cities –London and Mumbai. Walking up from the by-lanes of Fort and reaching Mumbai CST discussing about traffic and problems, he said Mumbai needs to encourage public transport more and that more Metro lines will be of help. “The Monorail is quite an out-dated mode of transit and I don’t know why Mumbai got one,” he wondered.
At Mumbai CST, he took a few photographs of the DC and AC suburban trains in one premise, the Star Chamber and the jumble of train indicators. Wolmar had a train to catch the next day early morning to the south and after the photos sessions, we soon decided to end the adventure. On his way back to the Taj, Christian Wolmar had one thing to say about Mumbai railway- just fascinating!
(Rajendra B Aklekar has been a journalist for 20 years and author of Halt Station India, best-selling book on history of India's 1st railway line, short-listed for the non-fiction award at the Bangalore Literary Festival 2015)