A real estate company, Pearls Agrotech Corporation Limited (PACL) ditched the investors and collected more than Rs. 50,000 crores from them. The investors were duped and they never got the land they were promised. When this scam came to light, SEBI and the Indian Government looked into the matter and the proceeds of the case were handed over to the Justice R. M. Lodha Committee. The Committee had invited claims from the PACL investors and also planned to recover the entire amount by selling off various scattered properties of PACL.
Sources of Funds Recovery
- 1121 PACL FDRs with 23 Banks
- Rs. 16, 86, 98,766 recovered from Systematic Venture Capital Trust (until 06.01.2017)
- Rs. 72, 37,393 collected from PACL hotels
- 100 million collected from other PACL properties in Australia + Sheraton Mirage Hotel worth 170 million
- 100 million Australian Dollars which equals Rs. 5,23,14,20,000 generated from various scattered properties of PACL in Australia
- Sheraton Mirage Hotel situated at Gold Coast, Australia worth Rs. 8,89,34,14,000. The Australian property/assets of Pearls come out to be more than Rs. 1, 400 crores in total.
|Round||Number of Investors||Amount Refunded|
|1st||1,13,353||Rs. 2500 per claim|
|2nd||2,77,544||Rs. 5000 per claim|
|3rd||8,31,018||Up to Rs. 7000 per claim (Rs. 204.85 crore total)|
|4th||12,00,000||Up to Rs. 10,000 per claim (more than Rs. 429 crore total)|
|5th||1,00,000||Up to Rs. 15,000 per claim|
|6th||1,14,933||Between Rs. 15,001/- and Rs. 17,000/- per claim|
As of date, the Committee has successfully effected refunds in respect of a total number of
19,61,690 eligible applications with outstanding (principal) amount upto Rs. 17,000/- aggregating to
Rs. 919.91 crore.
SEBI likely to get Rs. 1400 Crores in January 2019 from PACL’s Australian Property
Now that the Australian Federal Government has accepted the petition filed by SEBI (dated July 20, 2018) seeking the sale of the property/assets of PACL in Australia, the investors can now get a sigh of relief. All the property/assets of Pearls raised in Australia have been sold by the Federal Government and money has been acquired.
According to a few reports, SEBI is likely to receive 270 million or 14, 12, 48, 34, 000 INR next year in January from the Australian Government. After receiving this amount SEBI may start the second round of refunds. Therefore, the investors whose claiming amount was more than Rs. 2500 might get their refunds back real soon.
For initiating the next round of the refund process, SEBI might ask the remaining 5 crores investors for the entire details just like they released the claim application forms for refunding the claimants with Rs 2500 amount. The refund application form might be available on SEBI’s official website where claimants can file their refund claims. The wait will finally get over as and when SEBI releases something officially.
Other Investors still waiting for Refunds
Though the refund process has started and some investors have been refunded but still there is a long way to go if we look at the number of investors who are still waiting for their money. It is very clear from the number of properties PACL had acquired, that there is ample amount of money (Rs. 8500 crores) that can be used to refund all the PACL investors. Now, it is up to the Lodha Committee and SEBI to refund the investors. They already took 7 – 8 months in refunding the claimants with the principal amount of up to Rs. 2500. The investors with this amount were very few, and even then it took so long, so the rest of the investors (more than 4 crores) can calculate the time period in which they will get their refunds.
Pearls scam is a wake-up call for all the investors looking to invest in real estate. These scams discourage people from investing so the Indian Government needs to take stern steps to curb this menace. It is really the need of the hour as not investing anything will eventually lead the Indian economy to a sudden decline. Investors should be given protection regarding these frauds and strict rules should be formed to save them from getting duped for life.