Enforcement Directorate probes PACL

Company to be investigated for alleged money laundering

Troubles for PACL, formerly known as Pearls Agrotech, are likely to increase as the Enforcement Directorate (ED) has initiated an enquiry against the company for alleged money laundering under the Prevention of Money Laundering Act (PMLA).

Sources say the ED will seek the Securities and Exchange Board of India (Sebi)'s report of the investigation it had undertaken against the company. Sebi had found that the company had raised about Rs 49,100 crore from 50 million investors through a collective investment scheme (CIS), which is illegal. The mobilisation of funds by PACL traces back to 1990s.

The ED's decision comes on the heels of a Sebi order, issued a fortnight ago, to attach all the assets of the company and its directors.

THE LOWDOWN

• The Enforcement Directorate (ED) has initiated an inquiry against PACL for alleged money laundering under the Prevention of Money Laundering Act
• Sebi had found that the company had raised about Rs 49,100 crore from 50 million investors through a collective investment scheme, which is illegal
• The mobilisation of funds by PACL dates back to 1990s
• The ED's decision comes on the heels of a Sebi order, issued a fortnight ago, to attach all the assets of the company and its directors

“Prima facie it looks like a case of money laundering and funds seem to have been siphoned off. We are in the early stages of investigation,” said a source privy to the developments.

The total attachment could be about Rs 55,000 crore, including interest and fine.



An email sent to the company did not elicit a response till the time of going to press. It is learnt that Sebi has also filed a first information report (FIR) against the company for continuing operations despite an order to wind up. According to the market watchdog, a number of investors have raised their voice on the lack of refund.

Last year, Sebi had directed 10 entities – Tarlochan Singh, Sukhdev Singh, Gurmeet Singh, Subrata Bhattacharya, Nirmal Singh Bhangoo, Tyger Joginder, Gurnam Singh, Anand Gurwant Singh, Uppal Devinder Kumar, and the company – to give the money back to investors within three months.

The matter went to the Securities Appellate Tribunal (SAT), which in August decided in favour of Sebi, giving PACL and the other entities another three months to comply with the order.

In October, Sebi slapped an additional penalty order against the company for Rs 7,269 crore.

PACL has already approached the Delhi High Court against Sebi’s order. The next date of hearing for the case has been set for Monday.