Nineteen months after the Central Bureau of Investigation (CBI) lodged a First Information Report against two Pearls Group firms for allegedly fraudulently raising Rs 45,000 crore from investors via collective investment schemes, the agency lacks adequate number of witnesses and complainants to back its case.
The CBI’s February 2014 FIR against the firms had alleged that they raised the sum in several states from around five crore investors by duping them with bogus land allotment letters. An agency source told HT, “The CBI does not have enough witnesses and complainants against the firms since a lot of investors are apprehensive that their actions might impact adversely upon their hard-earned investments with the entities.” The source said, “The investors apprehend that the firms may crash and with them their money would vanish too.”
The probe has revealed that the firms were allegedly running collective investment schemes under the garb of sale and development of agricultural land in an unauthorised manner. “The probe revealed that the firms were working as non-banking financial companies without requisite approvals,” said the source.
The firms have denied the CBI’s allegations against them. The website of one of the two accused firms, PACL, carries its spokesperson’s statement on allegations levelled against it, saying, “PACL has no intention of duping the investors but it is trapped in the legal tussle involving conflicting directives from SEBI and CBI.” Despite attempts, HT could not contact the firms’ spokesperson.
When contacted, another agency source said, “The agency is trying hard to get more investors join the probe.” He claimed, “There is a feeling among some investors that unlike the Saradha Group of ponzi firms, the firms accused in our case have not crashed or have vanished with the money and so such a situation should be averted.” Consequently, the agency probe is now equally focusing upon alleged irregularities in the way the investment schemes were being run, according to the source.
The agency has recovered over 14,000 property documents worth several thousand crore that showed that in several cases, plots were allegedly booked in the name of multiple investors. “In case, the investors would have wanted to sell off the land allocated to them, he or she may have ended in costly litigations,” according to the source.
Other alleged discrepancies included instances where though investors had made full payments towards purchase of land plots, no sale deeds were executed, indicating the transactions were related to collective investment schemes and were not real-estate deals.