Sebi fines PACL Rs 7,269 crore for illegal raising of funds

Mumbai: In its biggest ever fine, regulator Sebi on Tuesday imposed a penalty of Rs 7,269.5 crore on PACL Ltd and its four directors for illegal and fraudulent mobilisation of funds from the public, saying the company deserves "maximum penalty" for such large-scale duping of the common man.

The penalty follows another order by Sebi in 2014 wherein PACL was asked to refund Rs 49,100 crore it had collected through illicit schemes over a 15-year period.

The refund order was also upheld in August by the Securities Appellate Tribunal, where PACL had filed an appeal.

In its latest order, Sebi said that PACL made huge illegal mobilisation of money, leading to consequent profit to the tune of over Rs 2,423 crore in a short span of less than one year.

In a strong-worded order, Sebi said, "Keeping in view the entire facts and circumstances of the case... there can not be a better case than this which deserves the maximum penalty".

Seeking to send a strong message to the securities market at large that such violations would not be viewed lightly, Sebi said, "In the recent past, the country has suffered a lot in the hands of entities who indulge in such illegal money mobilisation under various schemes, wherein hard earned money of the common man has been duped".

"Thus, imposition of deterrent penalty is the need of the hour," Sebi said, while adding that its Prevention of Fraudulent and Unfair Trade Practices Regulations provide for "severe to severe penalties" for dealing with such violations.

Under Sebi norms, it can impose a penalty of Rs 25 crore or three times of the profit made by indulging in fraudulent and unfair trade practices and in the present case the regulator has imposed a fine equivalent to three times of the illicit gains.

Sebi said that its probe revealed that PACL and its four directors -- Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya -- had mobilised funds from the general public through illicit collective investment schemes including in the name of purchase and development of agriculture land.