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SC appoints panel headed by Justice Lodha to oversee refund to investors in Pearls Ponzi case

Apoorva Mandhani
4 Feb 2016 1:55 AM GMT
SC appoints panel headed by Justice Lodha to oversee refund to investors in Pearls Ponzi case
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In a relief to around six crore investors, the Apex Court on Tuesday set up a committee headed by former Chief Justice of India, R.M. Lodha, to oversee the refund of Rs 49,000 crores to the investors in the Pear Group Ponzi scam within six months.

The Bench, comprising Justice A.R. Dave and Justice A.K. Goel directed the committee to take over the asserts of PACL (formerly Pearls Agrotech Corporation Limited) and group companies and refund the investors from whom Rs 49,000 crore is said to have been collected. SEBI has been directed to co-ordinate the asset sale and refund.

CBI, which has been investigating the scam for over two years now, was directed to hand over the documents to the committee. The Court also directed the panel to decide on the modalities of sale, but hinted it would be via auction.

The Company was also restrained from collecting any more money, and all Courts barred from entertaining any plea with regard to the sale proceedings. It also directed that bank accounts of the firm sealed by the CBI be desealed for the amount to be disbursed among investors.

Over 10,000 properties of PACL Ltd spread across states like Punjab, Haryana, Rajasthan, and Delhi are likely to be sold, besides liquidation of their various cash deposits, for paying back the investors. The next date of hearing is August 2.

The money was collected by the Nirmal Singh Bhangoo-managed group through its two firms, Pearls Agrotech Corporation Limited and Pearls Golden Forest Limited. It was collected in Ponzi schemes for development of agricultural land.

The probe had begun two years ago, after SEBI received several complaints from the investors. On August 22, 2014, SEBI had asked PACL to wind up its schemes and refund the money collected from investors as the Collective Investment Scheme run by it was in violation of the SEBI Collective Investment Scheme Regulations, 1999. This order was upheld by the Securities Appellate Tribunal on August 12.

CBI had recently arrested Pearls Group chief Nirmal Singh Bhangoo and his three colleagues in connection with the scam. Last month, another bench of the Supreme Court had reconstituted the special committee under the chairmanship of Justice Vikramjit Sen to probe PGF, another company of the Pearl Group.

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