Market regulator Securities and Exchange Board of India (SEBI) has asked investors of PACL Ltd (erstwhile Pearls) to submit original registration certificates only after receiving an SMS from the justice (retd) RM Lodha committee. This is applicable only for investors whose claim money is between Rs10,001 and Rs15,000 and they have successfully verified their claims. The justice Lodha committee is supervising the Supreme Court (SC)-ordered process of selling PACL's assets across the country and refunding Rs49,100 crore collected from over 55 million investors.
In a release, SEBI says, "The justice (retd) RM Lodha committee (in the matter of PACL) has decided to call for original PACL registration certificate from eligible investors with claims between Rs10,001- and Rs15,000 whose applications have been successfully verified. To this end, SMS shall be sent to the eligible investors asking them to submit original PACL registration certificates"
"PACL investors who receive SMS from the committee requiring submission of original certificates issued to them by PACL, are requested to forward the same to: PO Box No.66, Belapur Post Office, Navi Mumbai -400614," the release says.
Starting from 1st April to 30 June 2022, eligible investors of PACL can send their original registration certificates in an envelope. These investors are requested to write the certificate number on top of the envelope and send only one original PACL certificate in each envelope. If the investor has more than one original PACL certificate, then she needs to send it in separate envelopes to the address mentioned above.
SEBI also warned PACL investors against submitting their original PACL registration certificates without receiving an SMS from the justice Lodha committee.
SEBI's investigations had earlier revealed that PACL, which had raised money from the public in the name of agriculture and real estate businesses, collected more than Rs60,000 crore through illegal collective investment schemes (CISs) over 18 years. Moneylife
had extensively reported on the PACL scam and you can read it here
In February 2019, a committee headed by retired justice Lodha had initiated the process of refunds in phases for investors, who had invested in PACL. PACL (or Pearls) is one of the largest Ponzi schemes in India which had been allowed to run for decades amassing over Rs60,000 crore. The committee had asked PACL investors to submit online applications for refund.
The Lodha committee has been processing applications received from investors in a phased manner, slab-wise and, currently, applications with claim amount up to Rs10,000 have been processed and payments have been made in respect of eligible claim applications.
The documents uploaded by the PACL investors are verified and then payment amount is calculated, applications processed and subsequently payments are processed.
The committee had also granted investors, having claims up to Rs10,000 and whose applications were found deficient, an opportunity to check status/ deficiencies in their applications and rectify the errors so that the applications could be processed till 31 March 2021.
Now, the opportunity to rectify errors in the claim applications is not available and investors may await further notification from the committee in this regard, SEBI says.
Further, SEBI says, "The applications where investors have indicated marked land allotted field as 'Yes' or where land has been allotted to the investor as per records provided by PACL, have been kept on hold and will be taken up for consideration at a later stage."
SEBI also clarified that the processing of cases where 'deferred/ endorsed' has been mentioned on the PACL certificate has been kept on hold.
The mobilisation of funds by PACL goes 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.
In September 2018, the enforcement directorate (ED) had filed a charge-sheet against PACL and its chief Nirmal Singh Bhangoo in connection with a Ponzi scam involving over Rs49,100 crore, which was collected allegedly by two companies from millions of investors. The ED, which started the probe after lodging an first information report (FIR) in 2015 based on the Central Bureau of Investigation (CBI)'s case, had, in January 2018, attached Australia-based assets of the Pearls group and Mr Bhangoo worth Rs472 crore.
Mr Bhangoo, his companies PACL and Pearls Golden Forest Ltd (PGFL), as well as several thousands of his commission agents were accused of cheating 55 million investors on the pretext of sale and development of agriculture land.
The companies made false allotments of land to investors. However, the companies never owned any land in their own name.
Mr Bhangoo and his companies promised the investors that allotment would be done on their investment between 90 and 270 days and, if not, handsome returns would be paid.