Sebi fines PACL, 4 directors Rs 7,269 cr in money pooling scheme

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Mumbai | Published: September 23, 2015 12:06:35 AM

Capital market regulator, Securities and Exchange Board of India (Sebi), has levied a fine of Rs 7,269.5 crore on Pearl Agrotech Corp...

Capital market regulator, Securities and Exchange Board of India (Sebi), has levied a fine of Rs 7,269.5 crore on Pearl Agrotech Corp (PACL) and its four directors  for running an illicit money pooling scheme worth Rs 50,000 crore.

The penalty follows a Securities Appellate Tribunal (SAT) order last month that upheld Sebi’s investigations and told PACL to close operation within three months from the date of the SAT order.

On Tuesday, Sebi’s adjudicating officer Amit Pradhan said the penalty is three times the profit accrued and commensurate with the default committed by the company and its directors. “It will give a strong message to securities market at large that such types of violations will not be viewed lightly,” Pradhan stated in a 42-page order, effective immediately.

In August 2014, Sebi found PACL guilty of violating collective investment scheme (CIS) norms by raising money without registering with the regulator.

Sebi had directed the company to refund close to Rs 30,000 crore raised from some 58.5 million customers through the CIS.

The money was collected by the Nirmal Singh Bhangoo-managed group through its two companies — Pearls Agrotech Corporation (PACL) and Pearls Golden Forest (PGFL), in Ponzi schemes under the garb of sale and development of agricultural land.

The amount concerned is twice that collected by the Sahara Group, which is said to have mobilised Rs 24,000 crore.

In April this year, the Supreme Court ordered Pearl Group companies to liquidate assets and repay investors spread across Punjab, Haryana, Rajasthan, and Delhi. The apex court ordered the company to liquidate property, cash deposits and other assets to repay investors.

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