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SAT upholds Sebi's order levying fine of Rs 2,423 crore on four PACL directors

PTI     January 14, 2020

The Securities Appellate Tribunal (SAT) on Tuesday upheld the fine of over Rs 2,423 crore levied by markets regulator Sebi on four directors of PACL Ltd for illegal fund mobilisation through various schemes from the public.

The order comes following appeals filed by the company and its directors against an order passed by Sebi in September 2017, which imposed a penalty of Rs 2,423.16 crore on them.

The company and its directors had mobilised funds to the tune of over Rs 2,686 crore by running unregistered collective investment schemes between 2013 and 2014.

Passing the order, the tribunal said "in our view, the collection so made by the appellants and the other entities was wholly illegal and the decision of the AO (adjudicating officer) that the amount so collected under the collective investment scheme is the illegal profit earned by the appellants and other entities does not suffer from any manifest error of law. The total amount of realisation made by the company and its directors amounts to illegal profits made by them."

"We are of the opinion that it is no longer open to the appellants to agitate the matter as the same has been decided by Sebi which order has been affirmed by this tribunal," it added.

The tribunal further noted that the amount mobilised during the period from September 2013 to June 2014 has not been refunded to the investors.

The regulator in September 2017 slapped a penalty of over Rs 2,423 crore to be paid jointly and severally by the directors of the firm -- Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya -- for violating provisions of the Prevention of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.

PACL was engaged in mobilising funds from the general public by sponsoring various schemes which were none other than collective investment schemes and which were being carried out without obtaining registration from Sebi as required under the regulatory norms.

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