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Sebi has ruled that curbs imposed on Pearls Infrastructure Projects, majority owned by PACL, will continue as it has rejected the plea to defreeze bank accounts on grounds that proceedings to recover over Rs 60,000 crore from the parent entity is going on.
Besides bank accounts, the regulator has refused to defreeze Pearls Infrastructure Projects Ltd's (PIPL) demat account and mutual fund holdings.
In a fresh order passed yesterday, the regulator said, "it has set aside the contentions of the appellant and direct that the directions as passed on September 2016 that no debit shall made in any bank accounts, lockers, demat accounts and mutual fund folios etc of PIPL shall remain in force".
According to Sebi, PACL holds 94.82 per cent shareholding of PIPL directly and indirectly through its associate or subsidiary companies.
Sebi had initiated recovery proceedings against PACL, its promoters and associate firms, including PIPL, to recover investors' money on September 7, 2016. It had ordered freezing of bank accounts as well as demat and mutual fund holdings of as many as 640 group entities.
In a directive to various banks, depositories and mutual funds, Sebi had asked them to ensure that "no debit" is made with immediate effect in any of the bank accounts, lockers, demat accounts and mutual funds of these entities, to which the PACL Group is suspected to have transferred money, including for purchase of properties.
The regulator found that the group, which had raised money from the public in the name of agriculture and real estate businesses, had collected these funds through illegal collective investment schemes over a period of 18 years.
Pursuant to a Supreme Court order, Sebi had set up a high-level committee to ensure that refunds are made to the genuine investors after sale of attached PACL assets, including vehicles.
The panel, chaired by former Chief Justice of India R M Lodha, is overseeing the process of disposing of assets to refund money to investors after verifying their genuineness.
The Securities and Exchange Board of India (Sebi) had already put on the block real estate properties of the group across 192 districts. Also, it had auctioned top-end vehicles of PACL Group.
In December 2015, Sebi had ordered attachment of all assets of PACL and its nine promoters and directors.
PACL had raised Rs 49,100 crore from nearly 5 crore investors that it needs to refund along with promised returns, interest payout and other charges, which took the total amount due to over Rs 60,000 crore.
The regulator had asked them to refund the money in an order dated August 22, 2014. The defaulters were directed to wind up the schemes, and refund money to the investors within a period of three months from the date of the order.