Mumbai: The Securities and Exchange Board of India (Sebi) on Tuesday began the process of refunding investors of PACL Ltd, a company that was banned in 2015 by the regulator for illegally collecting at least Rs49,100 crore from 58 million investors over 15 years.
Sebi said in a late Tuesday evening release that a committee formed under Justice (Retd) R.M. Lodha for selling PACL properties, will begin refunding the money so far realized by it. Sebi did not say how much it has managed to recover from PACL so far.
Sebi said that in the first round of refunds, the panel will receive claims from investors whose total outstanding principal amount with PACL does not exceed Rs2,500.
“It is clarified that refund may not necessarily be Rs2,500 per claimant investor, and would be effected on a pro-rata basis after considering the number of claims received as well as the funds available with the committee. Investors are advised to send the details to Sebi by way of SMS at 562632 or by uploading the same on http://sebicommitteepaclrefund.com,” the Sebi release read.
The last date for receipt of applications is 28 February.
On 23 August 2014, Sebi had ordered PACL and its directors to refund Rs49,100 crore with interest to investors within three months, after it found the group illegally mobilized money through collective investment schemes without a licence. PACL appealed the decision at the Securities Appellate Tribunal (SAT) and lost.
Sebi found that till March 2012, PACL mobilized public funds worth Rs44,736 crore. Later, between 26 February 2013 and 15 June 2014, the group admitted to having collected an additional Rs4,364.78 crore from some four million customers.
In 2015, the Supreme Court formed the Lodha panel to dispose of PACL’s assets and refund the money.
On 14 October 2016, Mint had reported that a multi-agency probe into PACL had revealed that the group barely had assets worth about Rs10,000 crore.
“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… 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,” the Mint report added.
In September 2015, Sebi imposed a Rs7,296 crore penalty on PACL and its four directors.
However, on 1 November 2016, SAT set aside the order, and directed the regulator to “reconsider the matter afresh”.
Following this, in September 2017, Sebi reduced the penalty to Rs2,423 crore, the highest penalty imposed by the regulator on any capital market defaulter.