SEBI puts an axe of property developer PACL Ltd
There are too many cases coming up lately where the developers have collected money from the citizens; however they do not own the land for which they have raised the funds. Another trend which is visible lately is that the real estate firms are raising funds from the retail investors, however are failing to register their land investment schemes.
The Securities and Exchange Board of India (SEBI), 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.
There are many companies, which raise funds from mostly low-income investors by offering higher interest rates than available on bank savings accounts. SEBI is trying to safeguard their interests and this action by the SEBI marks the country’s continued scrutiny of companies.
According to the SEBI Order, PACL ran an investment scheme that promised depositors returns on investments in agricultural land.India’s capital markets regulator, SEBI stated that the company allowed investors to deposit money in instalments or in a lump sum. The company had guaranteed returns after a fixed tenure.
The amount that PACL has been ordered to return would be $8.1 billion in deposits. Last year Kolkata-based media conglomerate Saradha was ordered to return$3.7 billion when the unlawful deposit scheme which they were running was busted.
Source- Financial Chronicle
investment scheme, land investment scheme, property developer PACL Ltd, Real estate firms, SEBI Order, Securities and Exchange Board of India
