SEBI asks Pancard Clubs to stop collecting money from investors
Moneylife Digital Team 31 July 2014
Pancard Clubs and its directors are barred from carrying on with their existing fund mobilizing activity through under holiday packages
 
The Securities and Exchanges Board of India (SEBI) ordered Pancard Clubs Ltd (PCL) and its directors to immediately stop collecting any fresh money from investors under its existing schemes; to not launch any new schemes or plans or float any new companies to raise fresh money; to submit a full inventory of assets obtained through money raised by PCL; to not dispose of any properties or assets obtained through money raised by PCL; to not divert any funds from PCL; and to furnish details sought by SEBI.
 
Whole Time Member S Raman, in his order said that, “I find no other alternative but to take recourse to an interim order against PCL and its Directors for preventing them from further carrying on with its existing fund mobilizing activity by launching 'collective investment scheme', without obtaining registration from SEBI in accordance with law.”
 
This order comes in response to complaints received against PCL, alleging fraudulent fund mobilisation across the country. In response to queries and details sought by the SEBI for the preliminary inquiry, PCL had responded that, “PCL is in the business of marketing time share products- room's nights of its hotels, affiliates and other hotels outside its group - to its prospective applicants at a fixed tariff, during the contracted tenure of the holiday options.” It added that, "PCL's business model does not fall under the purview of collective investment scheme."
 
An example of their scheme: The tenure of Pancard Clubs-dezire holiday option scheme is 37 months. The applicant has to confirm to acquire a minimum of 9 room nights and thereafter multiple of 9 room nights at the offer price Rs900 for one room nights. The applicant can choose the option of monthly or quarterly payment of the room night instalment at the time of obtaining the room nights. The applicant shall have to complete the payment towards the committed number of room nights in a maximum period of 27 months from the date of first payment. Persons completing all the 27 payments for the committed number of room nights shall be considered as a valid applicant and shall be formalised for and eligible for the benefits of the scheme. In the event of non-payment of instalment consistently, the applicant shall be levied a late fee of Rs25 per month for monthly option and Rs75 per quarter for quarterly option for each such delayed payment.
 
For all of PCL's eight schemes on offer, upon maturity, the applicant may surrender his unutilised room nights and opt for following:
  • • The applicant may opt for surrender value. The actual surrender value shall be determined by the company at the time of surrender of room nights and shall be paid after the expiry of tenure under the scheme.
• The applicant may opt to exchange or barter or utilise the products and services of the company or group companies.
• The applicant may opt to convert his unutilised room nights to the extent of surrender value entitlement into life membership of various clubs of the company/group.
• The company in its discretion may give an option to its applicant to convert his unutilised room nights, to the extent of surrender value, into shares, debentures
 
Based on the financial statements provided by PCL, SEBI found that there were inconsistencies in PCL's offerings. The order by SEBI noted, “It is noted from the analysis that only 0.34% of the investors/customers utilised the purchased room nights. From the details provided by PCL, it is observed that PCL has a total of 1,420 rooms (723 domestic and 697 foreign) of its own. As per the scheme details provided by PCL vide letter dated 11 April 2014, it is noted that the available room night for a year owned by PCL is only 5,18,300. However, it has sold around 1.35
crore room nights. In other words, PCL possesses less than 4% rooms.”
 
The order, while directing PCL and directors to abstain from further fund mobilisation and related activities as mentioned above, noted that, “The features of the Holiday Plans offered by PCL, as discussed in the preceding paragraphs, shows that the activity of fund mobilization by PCL under its 'scheme(s)/ plan(s)' Page 13of 15 with a resultant promise of returns, prima facie falls within the ambit of 'collective investment scheme' as defined under section 11AA of the SEBI Act. Therefore, I am of the view that PCL is engaged in the mobilisation of funds from public under its holiday plans, which is in the nature of 'collective investment scheme' as defined under Section 11AA of the SEBI Act.”
Comments
Bhausaheb Shelke
7 years ago
Fraud done with investors
Bhausaheb Shelke
7 years ago
Fraud done with investors
Bhausaheb Shelke
7 years ago
Fraud
Bhausaheb Shelke
7 years ago
Fraud
vandana naik
7 years ago
How can I get my money back from pancard fund as it is getting matured next month?
Pradip Kad
7 years ago
HOW CAN I GET BACK MY MONEY FROM PANCARD FUND?
satish wakchaure
8 years ago
hi..
plz give me suggestion for, How can i get money for pancard club.. and give me the contact number for any employed, for PAN CARD CLUB.
Pooja bhandari
Replied to satish wakchaure comment 8 years ago
Any update or any group or people working together for this
Arjun balgude
8 years ago
HOW CAN I GET BACK MY MONEY FROM PANCARD FUND?
suresh
8 years ago

Pan Card Club Ltd. a registered company is doing this business of selling room nights since last 20 years. What will happen to those who have invested in this company? A administrator should be appointed and the assured amounts to be paid to the room night purchasers. S.C. Should take the decision in this respect to amalgamate all the estate of the company for this purpose.
Suresh
shruti
8 years ago
What happens to all those who have bought into the scheme already? Any hope they'll get to recover their investment?
shruti
8 years ago
So what happens to those who have already bought into the scheme and want to collect their surrender value? Are they likely to recover their investment?
KAMAL KRISHNAN
8 years ago
SEBI should investigate the same with respect to Country Club/Country Vacations.

Thousands of people are getting under their trap everymonth.
Funds are collected by giving all sort of false promises and fooling around people.
KAMAL KRISHNAN
8 years ago
SEBI should investigate the same with respect to Country Club/Country Vacations.

Thousands of people are getting under their trap everymonth.
Funds are collected by giving all sort of false promises and fooling around people.
KAMAL KRISHNAN
8 years ago
SEBI should investigate the same with respect to Country Club/Country Vacations.

Thousands of people are getting under their trap everymonth.
Funds are collected by giving all sort of false promises and fooling around people.
Rohit
9 years ago
This is a fraudulent scheme. Their majority of the collections are from W.Bengal & Interior Maharashtra. this company more into money laundering. Read this article http://archive.tehelka.com/story_main50....
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