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UPDATE: In a release issued on 29th May, Vihaan Direct Selling (India), the franchisee of direct marketing company QNet, said it has filed a petition in Sessions Court challenging the blocking of its three web sites by the CERT-In on the orders of a Magistrate. Vihaan, in the statement also alleged that the Magistrate “failed to appreciate the fact that the impact of the order is like giving punishment before deciding whether the company committed any offence". It accepted that the sites www.questnet.net, www.qnetindia.in and www.qnet-india.com that have been blocked are the company’s e-commerce lifelines.
Kolkata-based Pailan Group has been raising money through its agents who promise high guaranteed returns on various investment schemes. Some are finding it difficult to get their money back. Is SEBI aware of it?
Despite the scandal over Saradha and other schemes, the Pailan Group of Kolkata continues to run collective investment schemes (CIS) through the network of its agents who promise high guaranteed returns. The financial instruments offered by the agent include debentures and various monthly income schemes (MIS). The Pailan Group claims it is into education, food processing, finance, sports, real estate, jewellery, healthcare, media and entertainment business and so far has collected a whopping Rs900 crore from investors without any permission from market regulator Securities Exchange Board of India (SEBI). At a time when the chief minister of West Bengal has targeted SEBI for the Saradha debacle, it is pertinent to ask whether the Palian group has come under the regulator's radar or not. More importantly, the group is not merely in collection mode, it is apparently finding it difficult to make payments already.
A Moneylife reader, Suman Uppal has written to say that she has not received her interest and maturity amount. “I have been searching for news on Pailan Park Development Authority but surprisingly couldn't find any news of the company. It has closed all its offices in Kolkata after collecting Rs900 crore as debenture investments. Company Law Board (CLB) Kolkata says, as it issued debentures, they do not come under its jurisdiction. When I tried to file a complaint on Ministry of Corporate Affairs (MCA) website it did not work. Why are all news channels and websites silent about the case?” she asked.
Pailan Park Development Authority (PPDA) Ltd, a Pailan Group company, has raised money by distributing secured redeemable non-covertible debentures through its network of agents. It also sold many monthly investment plans backed by gems and jewellery products. Company's official website explains its plans, which gives the option to buy its jewellery products, as well as, cash returns on its maturity. It is offering as high as 62.50% returns in five years.
Investors are feeling cheated and have alleged Pailan Group and its founder, Apurba Kumar Saha that he is responsible for not paying their interest and principal amount even after maturity as per their debentures and MIS plans. Investors also said that its diversified business seems genuine hence they believed agents and invested in Pailan Group's company which later on turned away, regulators should put its founders behind the bars.
There are many complaints against the Pailan Group by investors on the Internet. Here is what an investor has posted on consumercourt.in I purchased 300 units of secured redeemable non convertible debentures having face value of Rs1000 each from PPDA for a period of 15 years. It promised to pay a sum of Rs7500 per month from October 2012 onwards till the date of maturity. According to agreement, PPDA issued credit note (voucher) of Rs7,500 up to August 2013 but since September 2013, I haven't received any vouchers till now even after visiting their office and asking for my money. “Pailan Group is cheater, take drastic action against them, within the Ambit of law,” he wrote.
Jayanta Banerjee, another investor from Kolkata, said on consumercourtforum.in that, “I have a policy of PPDA, CIS Scheme(Recurring Deposit). After maturity on 11 July 2013, I went to the Pailan office to withdraw my matured fund but the company's chairman Apurba Saha told me to come after some days. I went many a times but he denied giving me any money and stopped answering my phone calls. I already filed a complaint to SEBI. My maturity amount is over Rs1.36 lakh. My father is a cancer patient, I need money and company has not paid me till now.”
A third investor says he invested Rs4 lakh in (Rs3.2 lakh in MIS plans and Rs80,000 in fixed deposit scheme) PPDA, but since July 2013, he has not received any interest as per the MIS plan. He also contacted the local office and head office but no one replied his complaints. He said he invested all his mother's assets into Pailan Group's plans on goodwill of the company but he has been cheated by them.
One such agent advertised it in typical multi-level marketing (MLM) way, Pailan Park Development Authority provides “BEST EARNING OPPORTUNITY in both MLM & MONEY MARKETING Concept”. Another agent on his blog explained Debentures of PPDA as “Secure Government Debenture” with promise of 100% government as well as bank security and offers unbelievable 27% interest on Debentures per month!!!
Earlier in February 2014, agents of Pailan Grop said at a press conference that they had filed a petition in the Calcutta high court seeking to recover Rs900 crore. They alleged that this group had lately turned delinquent, says a report from Mint newspaper.
Last year in May, two functionaries of Pailan group who were collecting deposits from customers without valid permission from Reserve Bank of India (RBI) and SEBI, were arrested by Police. The police says functionaries of several chit fund group were arrested on charges of forgery, irregularities of cash transaction and lack of valid licenses as per reports from PTI.
Moneylife has written several articles on frauds that lure gullible investors by floating various MLM and CIS and frequently warned investors that “If it looks too good to be true, it usually is.” This is clearly another in the same category.
Our email sent to SEBI, about the money collection schemes of Pailan Group remained unanswered till writing the story.
Pailan Group founder, Apurba Kumar Saha