On 2 January 2018, the Securities and Exchange Board of India (SEBI) issued a press release, to say that those who invested in PACL Ltd (formerly Pearls), India’s biggest Ponzi scheme to date, would receive up to Rs2,500 each on a pro-rata basis after selling some properties of the discredited Ponzi operator Nirmal Singh Bhangoo and his family. The decision, said the SEBI release, was taken by the Justice RM Lodha committee appointed by the Supreme Court. Investors are supposed to fill up an online form to get the money.
According to SEBI’s investigation, PACL had collected a stupendous Rs49,100 crore from 560 million investors over 25 years by systematically gaming our turgid judicial system and blocking the regulator'sattempts to prevent it from collecting further money. It is the poor victims who are paying a big price.
Unlike the Sahara group, where investors were hard to find, PACL has millions of investors scattered across the country and in remote villages; many are barely literate and clueless about the SEBI action except what is conveyed by agents who sold them the scheme. Even the literate ones are not necessarily financially or technologically savvy. On 23rd January, we hastily deleted from our website the details that a PACL investor had posted (his name, phone number, bank account details, Aadhaar number and address) in order to receive his refund. Those who are tech-savvy may scorn at this foolishness; but this is the reality that Indian policy-makers and regulators fail to see, in their rush to create a digital India.
Interestingly, way back in October 2015, Moneylife Foundation had written to SEBI asking it to create an online forum to allow pan-India investors to file complaints. SEBI had responded by asking investors to file their claims and complaints on SCORES, its online complaint-handling system. It proposed to print the complaints and send them to PACL for redemption. Several investors who submitted documents have heard nothing further and are unclear whether they will receive Rs2,500 at least.
In 2016, SEBI told investors not to part with their documents until it came up with an online process for filing claims. This took until January 2018. SEBI now has an online complaints forum which requires investors to send investment details by way of an SMS at 562632 or log on to https://sebicommitteepaclrefund.com/
. Unfortunately, the process is cumbersome. An instructional video in Hindi and English, on how to scan and upload documents, bank details and IFSC numbers, etc, doesn’t make it easier.
Consequently, PACL investors are posting pleas for help on websites such as ours, or worse, forming WhatsApp groups and seeking help from strangers. SEBI has ignored attempts by NGOs like Moneylife Foundation to help investors for reasons best known to it. Unless SEBI uses its own offices or the large investor protection funds at its disposal to set up helpdesks at its various offices to help victims file online complaints, many of them may miss the 28th February deadline, even to get back the paltry Rs2,500 of principal that is planned to be paid to victims in this round.