Mumbai: A multi-agency probe into PACL Ltd, which owes at least Rs50,000 crore to the public, has revealed that the group barely has assets worth about Rs10,000 crore, said three people with direct knowledge of the matter.
They did not want to named as the matter is sub-judice and the investigation findings are yet to be presented before the Supreme Court. The Securities and Exchange Board of India (Sebi), the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) are examining the case.
Not only are the assets insufficient for a refund, the group’s properties are scattered in hundreds of small pockets across the country, making it an uphill task for agencies to auction and recover funds, these people said.
Emails sent to Sebi, CBI and ED remained unanswered. An email addressed to PACL’s information desk didn’t receive a response as well.
“The scrutiny also revealed that a number of assets cannot be auctioned since they are not directly in the name of PACL or its promoters or its directors,” said one of the three people.
“The group was also found to have transferred money to other countries including Australia to buy assets there,” added this person. “PACL may also have transferred money to other unknown Indian entities, which is being examined by CBI.”
In August 2014, Sebi ordered PACL and its directors to refund Rs49,100 crore with interest to investors within three months, after it found that the group illegally mobilized money in the guise of collective investment schemes without a licence. PACL appealed at the Securities Appellate Tribunal and lost.
In 2015, the Supreme Court formed a committee under former chief justice R.M. Lodha to dispose of PACL’s assets and refund the money. On 30 September, the committee invited expressions of interest to buy PACL’s properties in 192 districts after receiving about 27,000 documents from various authorities. Sebi is also in the process of auctioning 47 vehicles, including luxury cars, owned by the company.
The second of the three people cited earlier said the assets identified so far are scattered unevenly.
“The assets are small both in terms of size and value and they are hardly fetching the prevailing circle rates. Both the buyer and the seller are not able to arrive at a reasonable good price. In some instances the properties may be sold at throwaway prices.”
These issues in tracing the properties and auctioning them would be submitted to the apex court in the next hearing, the three people said.
“The agencies will apprise the panel and the apex court about the issues that are being faced. Also, there is a case of siphoning off of funds to Australia, which the ED is probing,” said the third person.
An 18 August report by Bloomberg-Quint said that Sebi has moved the Australian Federal Court chasing a $133 million money trail from PACL to its Australian subsidiaries. Earlier, the court froze the proceeds from the sale of some PACL assets in Australia.