'Suspected shell cos' have links with PACL: Sources

As a probe by market regulator Sebi continues into 331 'suspected shell companies', investigations by various authorities have shown alleged links of some of these entities with troubled PACL group facing charges of running illicit collective investment schemes.
The Securities and Exchange Board of India (Sebi) recently asked the stock exchanges to restrict trading in shares of these 331 companies, following which some of them have approached the Securities Appellate Tribunal.
The SAT has ordered resuming trade in shares of eight companies, including Parsvnath Developers, JKumar Infraprojects and Prakash Industries, which had approached it against Sebi's directive, while it has asked the regulator to continue its probe and hear the companies concerned.

The regulator has begun issuing notices to these companies to explain alleged irregularities and their links with other groups facing regulatory actions.
Official sources said some of the companies in the list of suspected shell companies have been under the scanner of various agencies like SFIO, CBI, ED and the income tax department, among others.
According to sources in the regulatory and investigative agencies, alleged links of companies like JKumar and Parsvnath with PACL group have emerged.

When contacted, Parsvnath Chairman Pradeep Jain said, "We do not have any kind of relationship with PACL."
"Our company has not taken any contract from PACL," he added.

No immediate comments could be obtained from JKumar.
Several of these companies also had business links with each other as also with some other large groups facing action for illegal money-pooling schemes, the sources added.
The investigating agencies have found that some companies could have shown having got contracts from PACL, which has already faced Sebi action for illegally raising over Rs 50,000 crore as unregistered collective investment scheme.
The sources said these contracts did not relate to any actual work and were shown on the books just to inflate high turnover.
Another company on the list, Prakash Industries had come under the CBI scanner with regard to the coal scam. It has also been asked by Sebi to explain the alleged wrong-doings.