Despite CBI probe, Pearls group collecting illegal money: SEBI
19 Nov 2014 5:20 AM IST
The Securities and Exchange Board of India (SEBI) wrote a letter to the Ministry of Corporate Affairs (MCA) against Nirmal Bhangoo’s Pearls Agrotech Corporation Limited (PACL) after it continued to flourish by collecting money ‘illegally’ despite an ongoing Supreme Court-monitored CBI inquiry.
Ministry sources said, ‘At time when millions of investors are left to penury, PACL continues to grow after it came to our notice that they are still collecting money from people across the country with a false promise to double their amount in a short period of time, despite market regulator’s ban.’
On 14 November, the SEBI wrote an ‘alert letter’ to the ministry and requested it to take action against the company’s agents involved in such activities. Probe revealed that they are mainly targeting people living in the rural areas of South India and some parts of Uttar Pradesh, Bihar and Jharkhand.
For the last few days SEBI’s was receiving inputs about PACL’s dubious activities in some parts of India and after getting hold of ‘concrete evidences’ they alerted the MCA’s Serious Fraud Investigation Office (SFIO) to initiate the process of winding up of PACL’s illegal operations.
Immediately, files related to the case were sent to Union Finance and MCA minister Arun Jaitley and the probe agencies including CBI were asked to expedite the process to investigate Bhangoo’s dubious money trail.
Earlier, in August, the market regulator had passed an order against PACL, which reads, ‘The firm have to refund around Rs 50,000 crore raised from 58.5 million customers.’
Sources said, ‘Separate cases of cheating, fraud, criminal breach of trust and misappropriation of public funds have been lodged against Bhangoo in this matter. All the state governments have been alerted and were asked to take action against the accused persons for duping people.’
SEBI, in its 92-page order, says the total amount mobilised by the company, by its own admission, comes to a whopping Rs 49,100 crore. According to SEBI, this figure would have been even more if PACLhad provided the details of funds mobilised during the period of 1 April, 2012 to 25 February, 2013. ‘PACL operated a land investment scheme, which qualified as a collective investment scheme, without proper registration and investors failed to receive any land even after years of investments into schemes offered by PACL,’ SEBI’s report reads.
The PACL was floated in 1996 as Gurwant Agrotech Ltd and in early 2010, he made a significant expansion in to Australia purchasing the celebrated Sheraton Mirage resort. Pearl Australia has numerous projects, including construction of 1,000 apartments in Brisbane and development of 1,000 land lots in Melbourne. As per Global Financial Integrity Foundation (GFIF) India stands at number five among 142 countries in illicit financial flows and pegged the average flow of illegal funds in India at US $ 34,393 million. ‘Over the past 12 years, a total US $ 3,43,922 million dollars of illegal funds have been routed through India,’ GFIF report says.
Ministry sources said, ‘At time when millions of investors are left to penury, PACL continues to grow after it came to our notice that they are still collecting money from people across the country with a false promise to double their amount in a short period of time, despite market regulator’s ban.’
On 14 November, the SEBI wrote an ‘alert letter’ to the ministry and requested it to take action against the company’s agents involved in such activities. Probe revealed that they are mainly targeting people living in the rural areas of South India and some parts of Uttar Pradesh, Bihar and Jharkhand.
For the last few days SEBI’s was receiving inputs about PACL’s dubious activities in some parts of India and after getting hold of ‘concrete evidences’ they alerted the MCA’s Serious Fraud Investigation Office (SFIO) to initiate the process of winding up of PACL’s illegal operations.
Immediately, files related to the case were sent to Union Finance and MCA minister Arun Jaitley and the probe agencies including CBI were asked to expedite the process to investigate Bhangoo’s dubious money trail.
Earlier, in August, the market regulator had passed an order against PACL, which reads, ‘The firm have to refund around Rs 50,000 crore raised from 58.5 million customers.’
Sources said, ‘Separate cases of cheating, fraud, criminal breach of trust and misappropriation of public funds have been lodged against Bhangoo in this matter. All the state governments have been alerted and were asked to take action against the accused persons for duping people.’
SEBI, in its 92-page order, says the total amount mobilised by the company, by its own admission, comes to a whopping Rs 49,100 crore. According to SEBI, this figure would have been even more if PACLhad provided the details of funds mobilised during the period of 1 April, 2012 to 25 February, 2013. ‘PACL operated a land investment scheme, which qualified as a collective investment scheme, without proper registration and investors failed to receive any land even after years of investments into schemes offered by PACL,’ SEBI’s report reads.
The PACL was floated in 1996 as Gurwant Agrotech Ltd and in early 2010, he made a significant expansion in to Australia purchasing the celebrated Sheraton Mirage resort. Pearl Australia has numerous projects, including construction of 1,000 apartments in Brisbane and development of 1,000 land lots in Melbourne. As per Global Financial Integrity Foundation (GFIF) India stands at number five among 142 countries in illicit financial flows and pegged the average flow of illegal funds in India at US $ 34,393 million. ‘Over the past 12 years, a total US $ 3,43,922 million dollars of illegal funds have been routed through India,’ GFIF report says.
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