MUMBAI Aug 23 India's capital markets regulator
has ordered property developer PACL Ltd to return at least $8.1
billion raised from retail investors after finding the company
had failed to register its land investment scheme.
The action by the Securities and Exchange Board of India
(SEBI) marks the country's continued scrutiny of companies which
raise funds from mostly low-income investors by offering higher
interest rates than available on bank savings accounts.
According to the SEBI Order, PACL ran an investment scheme
that promised depositors returns on investments in agricultural
land. The regulator said the company allowed investors to
deposit money in instalments or in a lump sum, guaranteeing
returns after a fixed tenure.
Phone calls from Reuters to PACL's office were unanswered.
The amount that PACL has been ordered to return would be
well above the $3.7 billion in deposits Kolkata-based media
conglomerate Saradha was ordered to return last year, after
running un unlawful deposit scheme that went bust.
In a 92-page order issued on Friday, SEBI said PACL's
investment product qualified as a so-called collective
investment scheme, or deposit-taking payment plan, which should
be registered with the regulator.
Although SEBI did not specify how much money PACL would need
to return to investors, it estimated the amount raised under the
scheme amounted to 491 billion rupees ($8.1 billion), collected
from 58.5 million customers.
It said the amount raised could be higher, but it had not
obtained records from the company for the period from April 2012
to February 2013.
The regulator said all money raised from the plan would need
to be returned to investors within three months and barred the
company and its executives from raising any additional money.
(1 US dollar = 60.4650 Indian rupee)
(Reporting by Himank Sharma and Indulal PM; Editing by Rafael
Nam and David Holmes)