Friday, December 1, 2017

Pearl scam

CBI today arrested Chairman-cum -Managing Director of Pearls Group Nirmal Singh Bhangoo and three other top officials in connection with Rs 45,000 crore alleged scam in which 5.5 crore investors were duped.

Bhangoo, CMD of PGF Limited and ex-Chairman of Pearls Australasia Pty Limited, along with Sukhdev Singh, MD and Promoter-Director of PACL, Gurmeet Singh, Executive Director (Finance) and Subrata Bhattacharya, ED in the PGF/PACL Ponzi Scheme Case, CBI Press Information Officer R K Gaur said.

Senior CBI officials said the four executives were arrested after detailed questioning today at agency headquarters.

The sources said during the questioning they were giving inconsistent statements and stopped cooperating which resulted in their arrest.

"The case involves alleged collection of Rs 45,000 crore from about 5.5 crore investors all over the country.

The case was registered under sections 120 B (criminal conspiracy) read with 420 (cheating) of IPC," Gaur said. The investors were lured with the promise of huge returns.

Pearls Group chief arrested in connection with Rs 45,000 crore scam

CBI sources said arrests have been made in connection with the case against officials of Pearls Agrotech Corporation Ltd (PACL) and Pearls Golden Forest Ltd (PGF) for allegedly raising investments from over 5.5 crore investors through collective investment scheme under the garb of sale and development of agricultural land.

They said the agency's probe into the allegations has shown that investors were issued bogus land allotment letters.

In ponzi schemes, returns are given to investors from the money collected from other depositors in a pyramid-like structure.

CBI sources said that during the searches it had recovered documents which show benami properties worth crore in India and abroad.

It was revealed that PGF, on being directed by the High Court of Punjab and Haryana to wind up the scheme and refund the money to the investors, a similar fraudulent scheme was operated under the name of PACL with office at Barakhamba Road in New Delhi, CBI had alleged in its FIR.

It is alleged that funds collected from new investors of PACL were used to repay the earlier investors of PGF to stave off criminal prosecution.

It alleged funds have been raised by the two companies through a vast network of lakhs of commission agents spread all over the country who were being paid hefty commissions for luring the investors.

Pearls gave Rs 9,500 crore as agents' commission: CBI

 Pearls group chairman Nirmal Singh Bhangoo and accomplices cheated investors to the tune of Rs 45,000 crore through 23 lakh agents who received Rs 9,500 crore as commission to lure over five crore investors, CBI has alleged in its charge sheet filed today.

CBI sources said these agents, which included 1700 senior executives, worked in a multi-level marketing mode, received a commission of a whopping over Rs 9500 crore between 1996 and 2012 for allegedly luring the gullible investors to deposit in their schemes.

The charge sheet was filed here before Chief Metropolitan Magistrate Charu Aggarwal who took cognisance of it and fixed the matter for scrutiny of documents on April 21.

The sources said agents worked in 11 level pyramid with those at top levels earning in lakhs as commission.

According to the sources, the companies -- PACL and PGF-- claimed investors would be given agricultural land in return of their deposits with the company. Once deposits were made, the company promised to provide investors with an allotment letter within 90 to 270 days.

The company allegedly provided these allotment letters to the investors with the condition that it reserved the right to change the location of the land allotted to them any time. The investors were allotted land in Medak in Andhra Pradesh and Ajmer and Bikaner in Rajasthan.

The sources, quoting from the charge sheet, said the companies allegedly kept allotting land which did not belong to them through the allotment letters issued to the investors. Large number of investors did not get their promised investment back.

The sources said Bhangoo through his executives, and relatives allegedly created front companies which entered in benami deals of properties. This was allegedly done to evade the sealing of land which can be held by a company or an individuals, they said.

They claimed the company also used the modus operandi to evade stamp duty.

CBI also informed the court that it is keeping the investigation open. The agency is looking into alleged dealings of Bhangoo in Australia in which his daughter and son-in-law are also under its scanner.

Dealings of Pearls group in property business in Australia which included a hotel in Gold Coast area and transactions in Dubai are being probed, the sources said.

CBI has not given details of property the documents of which were recovered by it during the searches as these are still under investigation.

The sources said the agency has managed to seize 20,000 documents related to properties whose purchase value was estimated at Rs 5,000 crore.

Bhangoo, CMD of Pearls Golden Forest Ltd (PGF) and ex-Chairman of Pearls Australasia Pty Limited, along with Sukhdev Singh, MD and Promoter-Director of Pearls Agrotech Corporation Ltd (PACL), Gurmeet Singh, Executive Director (Finance) and Subrata Bhattacharya, ED in the PGF/PACL were arrested by CBI in connection with the scam.

Ponzi scam: CBI unearths another 1841 acres

CBI unearthed another 1841 acres of land after questioning of Pearl group owner Nirmal Singh Bhangoo in connection with the Rs 45000 crore Ponzi scheme. The land was purchased by Bhangoo in different parts of Haryana including Gurgaon, Ambala and Karnal. Beside land, the sleuths also identified 44 commercial properties owned by Bhangoo and his associates.

The properties seized on Friday were said to be valued at Rs 92.50 crores. The agency has earlier seized 553 acre land worth several crores that were held by him using front companies. According CBI, Bhangoo wanted to develop 482 acres of this land under the new land pooling policy.

CBI also said the Chandigarh based businessman also purchased a farmhouse in Delhi worth Rs 100 crores from former Haryana minister Gopal Kanda who was also under the cloud for his alleged role in a suicide case of airhostess Geetika Sharma.

The agency also claimed to have seized the documents related to another 11.50 acre farmland owned by Bhangoo and his company in Rajokari area of Delhi.

Chit fund scams: Rs 80,000 crore and counting

Chit fund companies have duped thousands of gullible depositors of at least Rs 80,000 crore, according to estimates of CBI which is probing such cases across the country.

Agency sources said the amount is likely to be higher than the initial estimate as the probe is still on. These companies with operations across the country lured people by offering attractive interest rates and, in the case of Pearls Group, land.

Over Rs 30,000 crore has allegedly been collected from small investors by the chit fund companies operating in four eastern and northeastern states -- West Bengal, Assam, Odisha and Tripura, while Pearls Group which operates in Punjab and other north Indian states duped investors to the tune of Rs 51,000 crore, they said.

The deposits mobilised by the companies was allegedly used to purchase land, open media outlets, hotels and other businesses, denying depositors their dues.

The sources said the figure of Rs 80,000 crore is an estimate based on investigation so far and quantification of deposits collected from investors is still going on.

CBI has so far registered 76 cases, based on over 253 FIRs in these four states with 31 charge-sheets being filed by the agency in connection with the scam.

The agency has filed three cases against Rose Valley Group and seven against Saradha Group in connection with the fraud, called Saradha scam.

The sources said over six crore people have been duped by the companies across the country with majority of them allegedly being trapped by Pearls Group which has been operating for last 20 years before being busted by the agency.

The sheer sweep of the scam makes it one of the most difficult cases to be investigated by the agency in which several big operators including a former Union Minister, a state minister, an MP, a former journalist and politicians are being probed by it, they said. The agency said a lot of paper work is needed in probing economic offences like chit fund scam as flow of money is normally hidden in form of complex, layered data in files and computers.

The mining of data also requires forensic help, making it a time consuming process.

They said the agency suspects that such a big scam would not have been possible without some officials of regulators having ignored the operations of these companies. The agency has questioned officials of SEBI and RBI in this regard.

Recently, CBI Director Anil Sinha had said about the Pearls Group, which is the largest chit fund group being investigated for alleged malpractices, that "it needed the Supreme Court to step in and order investigations and later order return of money to the depositors under its supervision. Should not the regulator have suo motu stepped in proactively to protect the rights of 5.5 crore ordinary depositors."

The Supreme Court, while handing over the probe in the case to CBI, had said investigation conducted so far puts a question mark on the role of regulatory authorities like SEBI, Registrar of Companies and officials of RBI within whose respective jurisdictions and areas of operation the scam not only took birth but flourished unhindered.

Pearls scam: CBI to send Letters Rogatory to Australia

 CBI will soon send judicial request to Australia to seek details of Pearls Group's activities there as it suspects Rs 670 crore collected from public for developing land and forests has been diverted to that country.

Agency sources said Pearls Group Chief Nirmal Singh Bhangoo was allegedly running real estate business -- portable housing projects -- in the name of his relatives in Australia and also reportedly owned a hotel on Gold Coast.

The sources said the agency is probing business dealings of Bhangoo through which public money might have been diverted, including TV channel P7 News, a joint venture with Australian company Global Road Technologies (GRT) International and PHT LifeStyle.

GRT is based somewhere between Gold Coast and Brisbane and had entered into a joint venture with Pearls Group, which is facing probe here for allegedly duping over five crore investors to the tune of Rs 45,000 crore.

They said the alleged diversion of funds to Australia also took place through Global Road Technologies.

Directors of Pearls Group companies PACL and PGF allegedly collected funds from people in the garb of sale of land and forests to them and "deliberately and dishonestly diverted" funds to Australia without informing the investors, the sources said.

The agency will soon be sending Letters Rogatory to Australia seeking information about his business interests, companies suspected to be working with him, assets etc.

Letters Rogatory is a document issued by a court of a sovereign country to a court in another nation seeking legal assistance in probing a crime.

They said, if needed, LRs will also be sent to Dubai in this connection as it is investigating the diversion of some funds there.

During the probe in the last two years, CBI has found 1,300 bank accounts of the suspect company, its directors, and associated firms, they said, adding the agency has frozen assets (mostly Fixed Deposit receipts) to the tune of Rs 280 crore and an additional Rs 108 crore has been deposited with the Delhi High Court.

They said the agency has managed to seize 20,000 documents related to properties whose purchase value was estimated at Rs 5,000 crore.

Bhangoo, CMD of Pearls Golden Forest Ltd (PGF) and ex-Chairman of Pearls Australasia Pty Limited, along with Sukhdev Singh, MD and Promoter-Director of Pearls Agrotech Corporation Ltd (PACL), Gurmeet Singh, Executive Director (Finance) and Subrata Bhattacharya, ED in the PGF/PACL were arrested by CBI in connection with the scam.

ET Editor: We have received a communication from the Lawyers of Global Road Technologies Pty. Ltd.(GRT) stating that GRT is not associated and / or connected with the Pearls Group of Companies in any manner whatsoever. Furthermore, GRT is not a partner with the Pearls Group and has neither been a shareholder nor an investor in the Pearls Group. We wish our readers to read this article against this backdrop.

Can CBI probe all 76 FIRs related to Pearl scam, SC asks probe agency

The Supreme Court asked the CBI on Wednesday to examine whether it could investigate all 76 FIRs lodged against Nirmal Singh Bhangoo-headed Pearl group of companies in different states in connection with a Rs 45,000 crore land development scam.

One of the arrested directors of Pearl group had requested amalgamation of all the 76 FIRs registered. Appearing for him, senior advocate Anil Divan told a bench of Justice A R Dave and Justice A M Khanwilkar that his client was being taken into custodial remand by police in different states from time to time for investigation. "It would be better if the FIRs are amalgamated and its probe entrusted to one agency," he said.

CBI's counsel R Balasubramaniam said the agency was investigating only the case relating to Delhi. "Cases lodged by state police relate to cases of cheating committed by the group and its officials in those places. It would be a Herculean task for the CBI, in terms of both manpower and infrastructure, to take up investigations into all 76 cases," he said.

The bench said, "We are not suggesting amalgamation of the cases. As per our February 2 order, the CBI was to investigate the alleged fraud committed by the Pearl group. Let the CBI examine all 76 FIRs and give us a report by January 10 stating whether it would be possible for the agency to investigate all these cases."

The CBI said, "Different state police are conducting investigation into different FIRs against accused persons pertaining to localised conspiracies employed to cheat individual investors. As directed by the Supreme Court, the CBI, on the other hand, is investigating a conspiracy on a much larger canvas with broader ramification, including diversion of funds through sham land developments in India as well as in Australia, Dubai and other countries."

The apex court had earlier directed the CBI to hand over title deeds of land purchased by group companies to an SC-constituted committee. "In compliance of the order, the CBI has already handed over 26,680 title deeds and registration papers of 47 luxury cars to the committee, which were seized from PACLBSE -1.82 % Ltd," the agency said.

The CBI has arrested top officials of Pearl group including Bhangoo and Sukhdev Singh, Subrata Bhattacharya and Gurmeet Singh of PACL. They have been lodged in Tihar jail in judicial custody since February 23. Bhangoo and his companies promised investors that allotment of land would be done on their investment in 90 to 270 days and if not, handsome returns would be paid. In the allotment letters given to investors, the company specified that it reserved the right to change the site of allotment even though the company never owned any land in its name. 

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