SAT sets aside Sebi order against an individual in PACL case

Securities Appellate Tribunal has quashed Rs 2.31 crore fine imposed on Uppal Devinder Kumar in the illegal money pooling case involving PACL and has directed Sebi to pass fresh order with respect to this individual.
Sebi had penalised Kumar saying that he was a director of PACL but disputing the same, he moved the tribunal against the ruling.
In February this year, Sebi slapped a penalty of Rs 23.32 crore on the company and its nine top executives, including Kumar, for illegally raising Rs 49,100 crore from investors.
Kumar approached the tribunal to appeal that he was never appointed as a director of PACL and even PACL had not made any filings before the Registrar of Companies (RoC) regarding the same.

According to the tribunal, Sebi order does not set out the basis on which the investigation report considered that Kumar had acted as a director of PACL.
"Without considering the merits of the investigation report qua the register maintained by the RoC and recording a specific finding, the Adjudicating Officer (AO) could not have held that the Appellant (Kumar) had acted as a director of PACL," SAT said in its order dated June 23.

Further, the tribunal observed that if there was any evidence in the investigation report that Kumar had acted as director of PACL, he should have been given an opportunity to deal with that evidence.

Setting aside the Sebi order with respect to Kumar, SAT said, "in the absence of any such opportunity given, the AO is not justified in holding that the appellant had acted as a director of PACL and impose penalty on the appellant along with other directors of PACL".
Sebi had found PACL collected over Rs 49,100 crore by running illegal collective investment schemes in the name of agriculture and real estate businesses, over a 18-year period.
The market regulator has directed refund of the money, along with applicable returns and interest payouts. Besides, attachment of certain assets of PACL and its top executives have been ordered to recover the dues.

The total money to be returned by PACL and another group firm PGFL amounts to over Rs 60,000 crore - making it the biggest ever case of illicit mobilisation of funds from the public.