Business

PACL in its proposal has submitted a proposal to the committee to recover more than Rs 15,000 crore in two years

Last month, PACL in its proposal has submitted a proposal to the committee to recover more than Rs 15,000 crore in two years. According to the proposal, the company offered to bring in buyers to purchase its assets for a total consideration of at least Rs 15,000 crore. Of this, the firm suggested bringing in Rs 7,500 crore each in the first year and the second year through either sale of its assets to buyers or to through facilitating collaboration with government entities to develop its properties.

The Securities and Exchange Board of India (Sebi) on Wednesday invited proposals from interested entities that can offer the higher price for the properties belonging to PACL group, than the plan put in place by the company. The regulator has told investors who are interested to submit counterproposals till June 21, to RM Lodha committee, in response to the proposal submitted by PACL Ltd, the regulator said in a statement.

 

Sebi’s move to invite counter proposal is a part of its efforts to recover funds of over Rs 49000 crore collected by PACL from small investors through various collective investment schemes (CIS). The panel, headed by former Chief Justice of India Lodha, is overseeing the process of disposing of properties to refund investors after verifying their genuineness. Sebi had set up a high-level committee following a Supreme Court order.

“Any person(s) /entity/entities desirous of offering a price higher than the value of the proposal submitted by PACL in respect of the properties ….may do so ….by way of a counterproposal signed by the authorised representative specifying therein the total value of such proposal placed in a sealed cover… on June 21, 2018,” said Sebi on Wednesday.

About three years ago, the regulator had directed  PACL to refund Rs 49,100 crore to investors. PACL ran the biggest illegal money pooling  scheme in the history of the country till its promoter Nirmal Singh Bhangoo was arrested by the CBI in January 2016 for alleged failure to refund over Rs 49100 crore collected from 5.85 crore investors over 15 years by offering investments linked to agricultural land and its development over a certain period of time. The company, which has had several run-ins with the judicial system and the regulator in the last 15 years over its business model illegally accepted deposits from the public through 67 different CIS.

The mobilisation of funds by PACL dates back to 1990s. Following a complaint, Sebi had first issued letters in November-December 1999 to PACL, advising it to comply with the provisions of the Sebi’s CIS Regulations dealing with Collective Investment Schemes. PACL then challenged the letters before the High Court of Rajasthan, claiming that its scheme does not fall under the definition of CIS. PACL had also challenged the constitutional validity of the CIS Regulations.

Leave a Reply

Your email address will not be published. Required fields are marked *