Regulator says PACL made profit of over Rs 2,400 cr in less than a year by raising funds illegally from public and deserves maximum penalty
Mumbai : In its biggest ever fine, regulator Sebi imposed a penalty of Rs 7,269.5 crore on PACL Ltd and its four directors for illegal and fraudulent mobilisation of funds from the public, saying the firm deserves “maximum penalty” for such large-scale duping of the common man.
The penalty follows another order by Sebi last year wherein PACL was asked to refund Rs 49,100 crore it had collected through illicit schemes over a 15-year period.
The refund order was also upheld last month by the Securities Appellate Tribunal, where PACL had filed an appeal.
In its latest order, Sebi said that PACL made huge illegal mobilisation of money, leading to consequent profit to the tune of over Rs 2,423 crore in a short span of less than one year. Seeking to send a strong message to the securities market at large that such violations would not be viewed lightly, Sebi said, “imposition of deterrent penalty is the need of the hour.”
Under Sebi norms, it can impose a penalty of Rs 25 crore or three times of the profit made by indulging in fraudulent and unfair trade practices and in the present case the regulator has imposed a fine equivalent to three times of the illicit gains.
The market regulator said that its probe revealed that PACL and its four directors — Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya — had mobilised funds from the general public through illicit collective investment schemes including in the name of purchase and development of agriculture land.
PACL and its directors have been told pay the amount to Sebi within 45 days. The company was running a land purchase scheme, where it was raising money from public to buy land. In the guise of selling agricultural land, it collected Rs 49,100 crore from 5.85 crore customers over a period of 15 years by promising them that the investments in the schemes of the company are highly profitable. This is the biggest-ever amount, as also the largest number of investors, so far involved in a case found to be running illegal money pooling scheme.
