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Mumbai, Aug. 22: PACL, formerly known as Pearls Agrotech Corporation Ltd, has been directed by the Securities and Exchange Board of India to refund around Rs 50,000 crore to investors, dwarfing the market regulator’s Rs 24,000-crore refund order slapped on the beleaguered Sahara group in 2011.
PACL has raised Rs 49,100 crore from around 6 crore investors.
In a 92-page order today, Sebi whole-time member Prashant Saran asked PACL along with its four promoters and directors — Tarlochan Singh, Sukhdev Singh, Gurmeet Singh, and Subrata Bhattacharya — to abstain from collecting money from investors and launch or carry out any collective investment scheme (CIS), making it the biggest crackdown on a large-scale money pooling scheme.
They have also been told to wind up all existing schemes and refund the collected money, with returns due to its investors, within three months.
Thereafter, within 15 days, they have been asked to submit a winding up and repayment report to Sebi, including the trail of funds claimed to be refunded, bank account statements indicating refund and receipts from the investors acknowledging such refunds.
Sebi said it was initiating further proceedings against the company and its nine promoters and directors for fraudulent and unfair trade practices and for violating its CIS regulations, following a direction from the Supreme Court.
“PACL had mobilised funds from its customers to the tune of Rs 44,736 crore till March 31, 2012. Further, by its own admission, it has collected Rs 4364,78,08,345 from 39,97,357 customers between February 26, 2013 and June 15, 2014.
“The total amount mobilised comes to a whooping Rs 49,100 crore. This figure could have been even more if PACL would have provided the details of the funds mobilised during the period of April 1, 2012 to February 25, 2013,’’ Sebi observed.
Sebi said the company raised money from around 5.85 crore investors, which included those who had been allotted land and those who were yet to get the land.
PACL said its business related to buying and selling agricultural land, including its development into cultivable land and providing other infrastructure on it. It said it was not operating any collective investment scheme and had allotted the developed land to customers as units.
The company said it would approach the Securities Appellate Tribunal (SAT) against the Sebi directive. “Sebi has failed to recognise the submissions of the company that it can’t be treated like a CIS. The company would now appeal this order before the SAT,” PACL said in a statement.