In its biggest ever fine, market regulator SEBI on 22 September 2015 imposed a penalty of 7269.5 crore rupees on Delhi-based property developer PACL Ltd and its four directors. PACL and its directors have been told pay the amount to SEBI within 45 days.
The four directors who have been penalised by SEBI are Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya.
It penalised the PACL for failing to register the company's collective investment scheme that mopped up thousands of crore from small investors. SEBI said that PACL made huge illegal mobilisation of money, leading to consequent profit to the tune of over 2423 crore rupees in a short span of less than one year.
The penalty was imposed under Prevention of Fraudulent and Unfair Trade Practices Regulations which provide for severe to severe penalties for dealing with such violations.
Under SEBI norms, it can impose a penalty of 25 crore rupees 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 gain.
The penalty follows another order by SEBI given in 2014 wherein PACL was asked to refund 49100 crore rupees it had collected from 5.85 crore customers through illicit collective investment schemes including in the name of purchase and development of agriculture land over a 15-year period.
The refund order was also upheld in August 2015 by the Securities Appellate Tribunal, where PACL had filed an appeal.
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Who: PACL Limited
When: 22 September 2015