Sebi imposes Rs 2,423 crore penalty on PACL, four directors for illegal mobilisation of funds

NEW DELHI: Markets regulator Sebi on Thursday imposed a penalty of Rs 2,423 crore on PACL and its four directors for illegal mobilisation of funds from the public.

In an order, the Securities and Exchange board of India (Sebi) said in an investigation it was found that directors Tarlochan Singh, Mr. Sukhdev Singh, Gurmeet Singh, Subrata Bhattacharya and certain other past directors had mobilised funds from general public via collective investment schemes, without obtaining registration from the regulator.

Earlier in 2015, Sebi had imposed a penalty of Rs 7,269.5 crore on PACL Ltd and its four directors for illegal and fraudulent mobilisation of funds from the public, saying the company deserves "maximum penalty" for such large-scale duping of the common man.

But the fine was challenged in Securities Appellate Tribunal ( SAT), which had ordered the Sebi to issue a fresh order in the case.

With PTI Inputs
While the group, which had collected money in the name of real estate projects among other schemes, was asked by Sebi nearly three years ago to refund Rs 49,100 crore to the investors, the regulator has passed a fresh order to impose a monetary penalty for violation of Sebi's Prevention of Fraudulent and Unfair Trade Practices Regulations.

The refund process is being overseen by a Supreme Court- appointed committee, which has been able to collect "only a few hundred crores", Sebi said, while noting that the case requires imposition of a much bigger penalty equivalent to three times of the illicit gains made by them.

However, "as the interest of investors is paramount", Sebi has decided to impose a monetary penalty equivalent to the profits made through the illegal mobilisation, the 47-page order said.

Sebi has asked PACL Ltd and its four directors -- Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya -- to "jointly and severally" deposit the penalty amount within 45 days.

The group was found by Sebi to have collected Rs 49,100 crore through unregistered collective investment schemes in violation of rules over a period of 15 years.

About the latest case, for which the order was passed today, Sebi said the magnitude of the violation can be assessed from the fact that huge illegal mobilisation of money was made leading to consequent profits to the tune of Rs 2,423 crore in a short span of less than one year.