Five things to know on PACL realty firesale

About 26,500 of Nirmal Singh Banghoo-led PACL's properties have been put on sale by Sebi

An extended deadline in the sale process of about 26,500 properties belonging to PACL (formerly Pearl Agrotech) across the country is drawing to a close on Saturday. The process is being undertaken by the Securities and Exchange Board of India (Sebi), under the supervision of a Supreme Court-appointed committee headed by the country’s former chief justice, R M Lodha. Some important details:

What is Saturday’s deadline for?
For filing Expression of Interest (EOI) to bid for a particular property from the 26,500 spread across 192 districts. Each EOI must be accompanied by a non-interest bearing refundable deposit of Rs 5,000. In the first phase, which closed on September 17, the Lodha panel had received a little over 6,500 EOIs. On September 30, the panel reopened the window for 15 days.

Does EOI involve any indication on price?
In the Sebi procedure, there is no discussion on price of the properties at the EOI stage. Neither is the reserve price of the property indicated, nor is the bidder required to indicate the price he is prepared to pay at this stage. The bidder will have access to the title deed of the property on auctionpacl.com portal, made for the sale. This document is likely to have the price at which the property was purchased by PACL or its representatives. For example, some land holdings in Tamil Nadu, purchased in 2001, changed hands at a price of Rs 12,000 an acre.

When will bidders know the reserve price?
After receipt of EOIs, the auction shall be conducted within two months or such reasonable time as may be determined by the committee. For the auction, a reserve price will be fixed, considering the market rate or circle rate or both. An interest-free Earnest Money Deposit (EMD, a tenth of the reserve price) is required to be given for participating in the e-auction. Bidding will happen after this.

Is this EMD refundable?
The EMD is adjustable to the total consideration for the property, if successfully bid and the successful bidder purchases the property. It would be forfeited if, after bidding successfully, the successful bidder reneges from his commitment. In other cases, it will be refunded.

Is there any estimate on approximate value of properties being auctioned?

When the Central Bureau of Investigation (CBI) handed over "20,000 documents" seized from PACL offices to Lodha panel in April, it was reported by PTI that these were worth about Rs 5,000 crore. Some reports suggested that Rs 5,000 crore was the total of purchase price of these properties and the current market value could be much more considering that many of these were bought by PACL over a decade ago.

Sebi had in its submissions to the courts in November said the assets of the company were worth about Rs 11,000 crore against investor dues of Rs 49,100 crore. Separately, the regulator has levied a record penalty of Rs 7,269 crore in September last year.