HT Explainer: Why investors are up in arms against Pearl group
Read on for all details of Pearls group scam.punjab Updated: Apr 26, 2017 11:36 IST
Read on for all details of Pearls group scam:
Know the scam
In 2003, Securities and Exchange Board of India (SEBI) and investors filed a case in the Supreme Court against Pearls Agrotech Corporation Limited (PACL) group, accusing it of fraudulently raising ₹45,000 crore from 5.5 crore investors via collective investment schemes.
In February 2013, the Supreme Court directed the Central Bureau of Investigation (CBI) and SEBI to investigate and scrutinise the PACL. A year later, the CBI in February lodged a case against two Pearls Group real estate firms for allegedly fraudulently raising ₹45,000 crore from the investors. Besides, 76 FIRs were registered against the groups’s chairman-cum-managing director (CMD) Nirmal Singh Bhangoo, 65.
After two years of investigation, the CBI in January 2016 arrested four of the group’s top officials, including Bhangoo, who was the CMD and promoter-director of the group’s Delhi-based firm — Pearls Golden Forest Limited (PGF), and a former chairman of the group’s Australia-based firm — Pearls Australasia Private Limited.
Formation of Lodha Committee
On February 2, 2016, the Supreme Court appointed a committee headed by of former chief justice of India RM Lodha to oversee the refund of ₹49,000 crore to 5.5 crore investors in the Pearl Group scam. The committee attached all assets of PACL and started auctioning the properties in March 2016.
Properties owned by PACL
According to the Enforcement Directorate, the PACL owns 1,354 properties, with the maximum being in Hoshiarpur at 330. Other questionable properties are in Nawanshahr (281), Rajpura (181), Mansa (117), Ferozepur (87), SAS Nagar (68), Gurdaspur (50), Ludhiana (41) and Fatehgarh Sahib (36). As per the CBI, PACL owns 68 offices in India and abroad, 553 acres in Delhi, and two big housing projects in Bathinda and SAS Nagar.
Bhangoo: From milkman to real-estate giant
Bhangoo, who is at present lodged in a Bathinda jail, hails from Bela village in Chamkaur Sahib of Rupnagar district. Having started as a milkman, he joined an insurance company, Pearless, as an agent in the early 1980s. However, he was told to leave after being accused of huge embezzlement of funds. He then moved to SAS Nagar and opened an investment company from a booth in Phase 7. Thereafter, he worked as an agent with Golden Forest India Limited, leaving it to start his own company, Pearls Green Forest Limited, in the late 1980s. He went on to acquire a wide-ranging portfolio with business interests in infrastructure, property development, hospitals, educational institutes, insurance, media and entertainment industry in India and abroad.
The CBI had in 2011 filed a chargesheet against him and former Medical Council of India president Ketan Desai for allegedly orchestrating an irregular grant of recognition to his Patiala-based medical college through the payment of a ₹2 crore bribe.
Where does the case stand now
Lodha Committee has hired three agencies namely HDFC Realty Limited, UTI Infrastructure Technology and Service and SBI Capital Markets Limited to sell the properties of PACL. The process is underway.
Investors of properties in Sector 100 and 104 are demanding that since people have already invested around ₹600 crore, GMADA and Punjab government should intervene in the matter and liaise with Lodha Committee to save the interest of allottees and residents.