Mumbai: The Securities Appellate Tribunal (SAT) has dismissed an appeal filed by Pearls Agrotech Corp. Ltd challenging the capital market regulator’s order to refund at least Rs.29,420.65 crore raised from some 58.5 million customers through collective investment schemes (CIS).
In an order issued on 22 August 2014, Sebi said it found PACL violating CIS regulations by mobilizing the money without registering with the regulator.
On Wednesday, the tribunal dismissed the appeal amidst protests from a large number of investors who have put in money in the company’s scheme. The detailed order would be uploaded on SAT’s website later on Wednesday. PACL has the option of filing an appeal in the Supreme Court.
As per the Sebi order, the company had allotted land to some 12.2 million customers till March 2012, when its total customer advances stood at Rs.14,331 crore. Pearls Agrotech told Sebi on 11 August 2014 that it had collected another Rs.29,420.65 crore from 46.31 million customers to whom it is yet to allot land.
The Sebi order further said the company did not have enough land and plots to meet the allotment requirements for customers who have been investing money in the company’s two schemes.
“The company has only lands worth Rs.11,706.96 crore out of which it has not only to satisfy the claim of 4.63 crore customers who have deposited Rs.29,420 crore with it, but also to satisfy 1.22 crore customers to whom the land has been allotted but sale deeds have not been executed. In view of the above, the proposal does not appear to be serious and reasonable,” Sebi’s whole-time member Prashant Saran said while issuing the order.
For raising such huge sums of money from the public over several years without securing regulatory permissions, Sebi directed Pearls Agrotech, its promoters and directors Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya to wind up all the existing schemes and refund the money within three months.
After the refund, the company was ordered to wind up its businesses within 15 days.
