As part of its ongoing exercise to recover Rs7035 crore to pay off over 51.55 lakh investors duped by the Pancard Clubs Limited (PCL), the Securities and Exchange Board of India (SEBI) has announced an e-auction of PCL’s properties located all over India, including Mumbai and Thane.
SEBI, which by now has auctioned nearly 57 properties and sealed 27 properties, has issued a fresh notification on 17 July, for the sale of immovable properties and vehicles. The immovable properties offered for sale, located in and around Mumbai include: a basement, ground floor and first floor at Khatau House, Mahim West (3788,1480, 8108.52 sqft respectively), 14 galas located at Kalyandas Bhawan, Dadar ( 6836 sqft), Hotel United- 21, Thane (3264.21 sqm), flat No 103, Gorai Shri Ashish Cooperative Housing Society, Borivali West (750 sqft), ground plus mezzanine floor, Vardhman Industrial Complex, Thane West (248.04 sqm) and three offices situated near Nerul railway station, Navi Mumbai (4129 sqft).
The properties in other parts of Maharashtra include: Hotel United-21, Lonawala, near Pune (10.114 sqm), 12 Bungalows at Lonawala, near Pune (4950 sqm Hotel United 21, Haveli, Pune (49,500 sqm), Resorts at Mahabaleshwar, Satara (8720 sqm) and Tiger Camp resort, Chandrapur (8.79 acres).
The properties elsewhere in the country include: land at Varca, Salcete, Goa (500 sqm), Hotel United-21, Somnath, Gujarath (12,800 sqm), Lake City Resort, Udaipur, Rajasthan (3245.2 sqm), Tiger Habitat, Kanha, Madhya Pradesh (3.28 acres), Jungle resort and Seoni, MP (3.53 acres).
The properties in the south include: land at Kodagu, Coorg, Karnatak (32.49 acres), Resort at Mysore, Karnataka ( 1384.23 sqm), land parcels at Kottayam, Kerala ( 14.14 acres), Resort, Dindigul, Tamil Nadu( 2acre) and Hotel United 21, Nilgriris, Tamil Nadu (5 acres).
Other parties include: Resort at Durgapur, Burdwan, West Bengal (11719 sqm), Hotel United 21, Mandarmoni, Beach View, West Bengal (7769.97 sqm), Resort at Paraganas, Sundarban, West Bengal (2.30 acres), Hotel United, Gurgaon, Haryana (2763.40 sqm ) and Hotel United 21, Bhimtal, Nanital, Uttarakhand (7870 sqm).
In addition the e-auction will also be held for sale of vehicles between 10.30 AM to 11.30 AM on 2 August. The vehicles for sale include: Mercedez Benz (MH 46 AK 5555) (reserve price-Rs 71,25,000) (EMD Rs712500/-), Mercedez Benz GL (MH 01 AU 5555) (reserve price-Rs17,25,000) (EMD Rs172500/-), Hyundai Verna (MH 21 BF 5534) (reserve price-Rs4,35,000) (EMD Rs43,500/-), Toyota Innova (MH 01, BG 9959) (reserve price-Rs791250) (EMD Rs79,100/-) and Maruti Alto (MH 01 BF 2841) (reserve price-Rs117750) (EMD Rs11,800/-).
PCL started in 1990 andmobilized money under its holiday scheme. It offered one and half time returns on money invested for three years, double returns after 6 years, two and half times returns after 9 years and two and three times returns after 10 years. PCL is alleged to have duped investors between 2002 and 2014 through its various holiday and collective investment schemes.
Till 2010-2011 the activities of PCL were normal. In 2010, SEBI scrutinized the documents relating to the business carried on by PCL and objected to its activities saying that its share capital stood at a meagre Rs50 lakh, while the money mobilized under its holiday scheme was over Rs7,000 crore. Besides, investment to the tune of over Rs1,000 crore was made towards acquiring hotels and resorts, thereby expanding inventory of properties on offer in the holiday scheme by utilising the proceeds of its money doubling scheme.
SEBI noted that Pancard Clubs mobilised Rs7,035 crore from 51,55,516 investors from 2002-03 to 2013-14 through its various holiday schemes. On 31 July 2014, it asked the company and its directors --"not to collect any fresh money from investors under its existing scheme” and "not to launch any new schemes or plans or float any new companies to raise fresh money.”
In November 2015, the the Securities Appellate Tribunal (SAT) asked PCL to immediately repay investors who had filed the intervention application. On 29 February 2016, SEBI ordered PCL, to provide full inventory of all the assets and details of properties held by its directors.
The company had failed to comply with SEBI’s directions issued in February 2016, to refund to investors their money. CMD late Sudhir Morawekar, Shobha Barde, Usha Tari, Manish Gandhi, Chandrasen Bhise and Ramchandran Ramkrishnan were the “directors” of PCL.
“The corpus of money accumulated by PCL by way of contributions to the holiday scheme was well above the limit of Rs100 crore set under the proviso of clause 1 of subsection 2 of Section 11AA of the SEBI Act, crossing which, a scheme is deemed to be a CIS," the Bench of Justice JP Devadhar, Jog Singh and Dr. CKG Nair Of Securities Appellate Tribunal (SAT) had said in its order.
The Bench had stated, that “the PCL transferred these investments to other schemes but gave a false affidavit that investors have voluntarily switched over to the non-refundable schemes. This was an attempt to deprive the investors of benefits which were originally promised by the company under its earlier schemes.”
On 12 May 2017, SAT upheld SEBI’s order that PCL is a CIS and needs to be wound up. SAT directed PCL to refund investors’ money within three months. However the investors are yet to get refund of their money. PCL was closed down by SEBI since May 2017.
Now the investors do not know to whom they should return their matured policy certificates. Some of the PCL’s hotels and restaurants are still functioning. As such SEBI should inform investors how much revenue PCL is collecting and to ensure that the investors’ money is refunded, Rashtrashakti Investors Co-ordination Committee (RICC) President Dnyaneshwar Darwatkar said.