Hyderabad: More than 5 crore investors of Pearl Agrotech Corporation Limited (PACL), spread across the country, including Telangana and Andhra Pradesh, have little chance of getting their hard-earned money back. While the investors from other parts of the country are set to lose Rs 50,000 crore, their counterparts in Telangana will be deprived of Rs 800 crore.
PACL had raised money from the public in 12 states to the tune of Rs 50, 000 crore in the name of agriculture and real estate projects for 18 years. The RM Lodha committee, appointed by the Securities and Exchange Board of India (SEBI) as directed by the Supreme Court, had identified properties of PACL in 192 districts in eight states, including Telangana and Andhra Pradesh, worth Rs 8,000 crore. However, there were few takers when auctions were conducted for them. Though a few companies came forward to bag these properties for Rs 600 crore, their proposals were rejected by the committee.
Subsequently, the SEBI informed the TS government that since there were few takers to buy the properties, it will be difficult for investors to get back their hard earned money.
PACL was set up in 1996 with presence in all major cities in the country. The company was into the money circulation business and had rolled out several fancy schemes like cash down payment down (CDPP) and instalment payment plan (IPP). Under these money-doubling schemes, the company was offering incentives and gifts to customers through its agents. Thus, the company managed to rope in 5,15,01,036 customers throughout India and collected `60,000 crore from them. This scrupulous money-making activity was conducted by the company for 18 years, the SEBI informed the government.
Following complaints from customers in December 2015, the SEBI ordered attachment of all assets and properties of PACL and its nine promoters and directors. On its part, PACL moved the Supreme Court against SEBI. The apex court, however, directed the SEBI to constitute a committee under the chairmanship of former Chief Justice of India RM Lodha to identify the properties of PACL and to put them for auction. Accordingly, the Lodha committee was formed in 2016.
The committee faced many hurdles in identifying the properties of PACL. The committee noted that in the absence of proper titles, buyers were sulking to buy these properties. When the properties were put for auction, the committee received objections. Thus, the committee decided not to auction those properties on which objections were raised.
However, the committee decided to go ahead with the auction of 1,560 of properties where more than one Expression of Interest (EOI) was received. Surprisingly, the properties were unsold, leaving the hapless investors of PACL in a lurch....