PACL, formerly Pearls Agrotech Corp is asked to pay Rs7269 crore as penalty for illegal and fraudulent mobilisation of funds from investors
Market regulator Securities and Exchange Board of India (SEBI) has asked Delhi-based PACL Ltd (formerly Pearls Agrotech Corp) and its four directors to pay Rs7,269.5 crore as penalty for illegal and fraudulent mobilisation of funds from the public. SEBI said the company deserves "maximum penalty" for such large-scale duping of the common man.
"In the recent past, the country has suffered a lot in the hands of entities who indulge in such illegal money mobilisation under various schemes, wherein hard earned money of the common man has been duped. Thus, imposition of deterrent penalty is the need of the hour," SEBI said in its order.
In August this year, the Securities Appellate Tribunal (SAT) had upheld SEBI’s order of last year that had asked PACL to refund money to investors in a land-purchase scheme operated like a mutual fund. According to SEBI, PACL has 58.5 million customers.
Last year in August, the market regulator, while barring the company and its promoters and directors from raising money had asked them to refund within three months Rs49,100 to investors. In pure rupee terms, the amount PACL is asked to refund is more than double of what Sahara group has been asked to return to investors by the Supreme Court.
SEBI said that its probe revealed that PACL and its four directors – Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya – had mobilised funds from the public through illicit collective investment schemes including in the name of purchase and development of agriculture land.
SEBI said that PACL made huge illegal mobilisation of money, leading to consequent profit to the tune of over Rs2,423 crore in a short span of less than one year. In a strong-worded order, SEBI said, "Keeping in view the entire facts and circumstances of the case... there cannot be a better case than this which deserves the maximum penalty".
Under SEBI norms, it can impose a penalty of Rs25 crore or three times of the profit made by indulging in fraudulent and unfair trade practices and in the present case the regulator has imposed a fine equivalent to three times of the illicit gains.