SC Issues Fresh Directions To PACL Ltd Following Lodha Panel’s Concerns Over Its Non-Cooperation

The ‘ponzi saga’ of the PACL Ltd, which is being monitored by the Supreme Court through the Lodha Committee, continues to unravel.On August 4, the Supreme Court bench of Justices Adarsh Kumar Goel and S.Abdul Nazeer, directed PACL Ltd to furnish information, as required by paragraph 4.4.7 of the Lodha Committee Report dated April 11.The Pearls Group of companies owe Rs.57,000 crore to around six crore investors. The Supreme Court set up the committee headed by the former Chief Justice of India, Justice R.M.Lodha in February last year, to auction properties of Pearls Group , to refund its investors within six months, as its total liability has been estimated as over Rs.80000 crores.It is estimated that the number of investors and amount involved is more than double of the Sahara case, which has been under the SC scanner. The money was collected by the group through its two companies, namely, Pearls Agrotech Corporation Limited (PACL) and Pearls Golden Forest Limited (PGFL), in ponzi schemes for development of agricultural land.The CBI registered a case against the company for duping investors and arrested its chairman, along with three other directors, who are in judicial custody.In its report, the Committee alleged that the company has neglected and failed to render any effective assistance to it. The Committee listed some of the important information sought by it, which the company did not submit. These include clarifications regarding difference in the details of customers providedin CD by PACL and the information submitted by PACL during SEBI investigation ; the documents of 106 properties, particularly those located in Delhi and Mumbai, in both hard and soft copies; complete details of the investors with clarifications regarding registration of customers prior to 1996, that is, before the incorporation of the company; and details of agricultural forms in tabular form.Others details sought by the Committee, which the company did not share include those of Satbari Farm, Mehrauli, Delhi, list of properties free from all encumbrances, list of properties which are generating income and the respective bank accounts where the proceeds are being credited, etc. The list includes 48 items, on which the Committee revealed the company did not share details.In its report, the Committee alleged that there has been hardly any cooperation from the company. In view of the concerns expressed by the Lodha Committee in its report, the bench directed the company to furnish details of properties that are still owned by it directly or indirectly.The bench also directed the PACL Ltd. to recover and deposit the following receivables within 45 days with the Lodha Committee: Inter-corporate loan and advances given to group or other corporate body or individual; Money advanced to commission agents/brokers with whom admittedly at least sum of Rs.2800 crores belonging to PACL is lying. Consideration amount against the sale of the properties, sold after February 2017.The bench directed PACL not to hinder or obstruct or in any manner delay the process of sale of its immovable properties by the Lodha committee as well as to render effective assistance and to cooperate with the committee.The bench made it clear that the Lodha committee will have the authority to pass such directions as are necessary to effectuate the mandate under the order of the Supreme Court.The matter has been listed again for hearing on October 10.

SC Issues Fresh Directions To PACL Ltd Following Lodha Panel’s Concerns Over Its Non-Cooperation

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