Why is CBI protecting Rs 60,000-crore scamster?

Around 9 am on Tuesday, officers of the Central Bureau of Investigation (CBI) walked into the Delhi Secretariat, the headquarters of the city government, and after nearly 20 minutes, the investigators were in the office of Rajender Kumar, next door to the Chief Minister.

The CBI officials allegedly sealed the entire floor, not allowing access even to the Chief Minister’s office and Arvind Kejriwal had to work from the office of his deputy, Manish Sisodia.

Now, what is interesting is the fact that when the CBI is so active in raiding the office of the Delhi Chief Minister, there is a conspicuous silence about the capital markets regulator Sebi’s major crackdown on PACL Ltd, attaching all assets of the company and its nine promoters and directors for their failure to refund more than Rs 60,000 crore due to investors which is perhaps the biggest illegal mobilisation of funds. What is even more surprising is that not a single promoter has been arrested even for a day in this regard which only goes on to show that a huge sum of money has exchanged hands.

The CBI had registered a case almost 10 months back in February and there was clear indication of a high-level political nexus. Forget the nexus, promoter Nirmal Singh Bhangoo was not even arrested for a day. 

What is all the more interesting is that the CBI had registered more than 100 cases involving chit-fund cases in West Bengal, Orisha and Assam including Saradha whose total deposits do not cross PACL’s amount of dues. 

Meanwhile, on Tuesday, the government issued instructions to the Registrar of Companies (ROC) to file prosecutions against PACL for non-compliance of provisions of the Companies Act and accounting standards, the Rajya Sabha was informed.

Minister of State for Finance Jayant Sinha said in a written reply to the Upper House: “The Ministry of Corporate Affairs had issued instructions to the concerned ROC to file prosecutions for non-compliance of various provisions of the Companies Act, 1956 as well as Accounting Standards.”

He said the ministry had received various complaints with regard to collection of deposits by PACL India alleging non-payment of amounts advanced to the company for purchase of land, money laundering and non-settlement of accounts in respect to transfer of land.

“It had been alleged that the company had collected Rs 50,000 crore through these schemes. Taking cognizance of such complaints, the Ministry of Corporate Affairs ordered inspection under the Companies Act (1956) of books of account and other record of the company,” Sinha said.

PACL had raised Rs 49,100 crore from nearly five crore investors that it needs to refund along with promised returns, interest payout and other charges, which take the total amount due to more than Rs 55,000 crore, Sebi said on Monday.

Besides, PACL has another group firm PGFL which has “illegally mobilised more than Rs 5,000 crore and failed to refund the same in spite of directions of Sebi and SAT,” the regulator said while initiating the recovery proceedings.

The proceedings have been initiated against PACL Ltd, as also its promoters and directors – Tarlochan Singh, Sukhdev Singh, Gurmeet Singh, Subrata Bhattacharya, Nirmal Singh Bhangoo, Tyger Joginder, Gurnam Singh, Anand Gurwant Singh and Uppal Devinder Kumar.

According to Sebi, PACL had raised about Rs 49,100 crore till Sebi ordered it to stop collecting money. The company needed to refund the funds raised along with promised returns, interest payout and other charges to its investors. Together the total amount comes to about Rs 55,000 crore. In addition, a PACL subsidiary had also raised about Rs 5,000 crore through illegal CIS which had to be returned to investors.

The Sebi case against PACL dates back to 1999, when acting on a compliant, the regulator ordered the company to comply with its CIS regulations.