Mystery realty firm raises eyebrows
A Delhi-based company, PACL India Ltd has succeeded in luring hundreds of thousands of people into investing in its realty-based scheme. HT reports.india Updated: Jun 29, 2011 00:39 IST
Can a company sell plots of land the way some companies sell cosmetics or food supplements? Will a realty-based multi-level marketing scheme work in a country faced with enormous shortage of homes?
The questions are looming large amid raised eyebrows as a Delhi-based company, PACL India Ltd has succeeded in luring hundreds of thousands of people into investing in its realty-based scheme.
Sources connected with the company’s vast network said its agents route investments from individuals, mostly from rural areas into the company’s several schemes that promise plots of land on offer across India.
PACL India Ltd, which also has its own real estate development business, promises prospective customers high interest on the money they deposit through appreciation of land prices, or through direct allotment of land.
No customer has suffered so far but the Securities and Exchange Board of India (SEBI) is said to be challenging PACL as it deems its activities as a “collective investment scheme” that is not permitted under laws. The Supreme Court is understood to be examining the dispute that dates back years.
“The company has not defaulted on any payments due to its investors till date,” a PACL agent told Hindustan Times on the condition of anonymity.The company is said to dole out commissions of up to 40% to its agents, spread across several layers.
PACL did not respond to calls or e-mail sent out by HT.
Realty industry sources said the company owns a land bank of around 180,000 acres estimated to be worth around R 70,000 crore and covers zones including small towns such as Visakhapatnam, Moradabad and Siwan and larger cities such as Mumbai and Delhi-NCR.
An analyst at a leading land consultancy firm said that land is a physical asset so there should always be clear holding of the land to prove ownership.
"A person can only own the land once physical possession of it is taken. A multi-level scheme simply does not have the wherewithal for such transactions,” said a real estate consultant who asked not be identified.