Sunday, 24 August 2014

Magnetic pillows to a Rs 50,000 cr empire: How PACL, Nirmal Singh Bhangoo made it big

There have been many Ponzi schemes in India's history and then there's Pearls Agrotech Corporation Ltd ( PACL), a conglomerate that has investments ranging from a hotel in Australia to educational institutes. The company has now been instructed by market regulator Sebi to return Rs 50,000 crore to investors within three months.
On its website, the group says it began with a clear road map in 1996: to develop real estate properties; and led by one-time dairy owner Nirmal Singh Bhangoo the company claims it was traditionally involved in the sale and purchase of agricultural land.  Some reports claim that the group initially started out as Gurwant Agrotech, a company selling magnetic pillows and similar products after which it adopted the name of PACL India in 1998.
Since then it has expanded its interests to start a tourism website, educational institutes, a news channel called P7, hotels in Goa and north India, and commercial and residential complexes in and around Delhi. It also owns the 296-room Sheraton Mirage Resort and Spa in Gold Coast, Australia which it bought for a whopping $62 million and reportedly spent $30 million to renovate. Its real estate arm in Australia is reportedly constructing 1,000 apartments in Brisbane and land lots in Melbourne.
But behind the expanse of a business conglomerate, the group faces accusations of being little more than a Ponzi scheme with Bhangoo accused of running a pyramid investment scheme that has allegedly duped around 5 crore investors of around Rs 50,000 crore.
Sebi had initiated action against PACL as far back as February 1998 when it told the group that it couldn't launch any new schemes or continue raising funds under existing ones. The regulator even issued a notice to it in November 1999 alleging that it was operating a pyramid investment scheme.
Little is known about Bhangoo.
Little is known about Bhangoo.
However, the company went to the Rajasthan and Punjab high courts claiming that it was involved in the business of sale and purchase of land and the matter finally landed up before the Supreme Court. The apex court passed an order on the matter in February 2013 asking Sebi to determine whether the group was running a ponzi scheme. However, the entire time the group continued to float new schemes and collect funds through existing schemes.
Defending the company against allegations, PACL CEO Jyoti Narayan had said that the company was a real estate company as it was the most profitable business.
"Therefore, this company does not come under the Sebi's, Irda's and RBI's terms and conditions. PACL is working under directorate of consumer affairs and PACL has also the membership of ficci. So, my friends don't worry about the your is totally safe," he had reportedly said, according to the PACL website.
The group has over 280 branches and had over 8 lakh commission agents who helped it raise money through instalment and cash down payment schemes under which investors were lured with the promise of an interest rate of 12.5 per cent on deposits, in addition to insurance and tax free returns, Daily Mailreport said.
The investors were promised that since the group invested in land their investments would multiply faster than other investments. The company even claimed that property consultants had valued their land at Rs 70,000 crore, despite the fact that some of it was desert land purchased along the India-Pakistan border in Rajasthan.
In February this year, the CBI filed an FIR against Bhangoo and seven others for allegedly raising money through a collective investment scheme with the promise of selling and developing agricultural land.
During searches carried out by the investigating agencies, CBI officials had claimed that they had recovered documents that showed benami properties worth crores in India and abroad. The CBI said that it had also found prima-facie evidence that one of the group's companies had raised money by issuing bogus land allotment letters.
In a detailed analysis of the group in India Today, Asit Jolly also points out that the group took a particularly keen interest in sporting events. The group sponsored the Kings XI Punjab squad in the fourth edition of the IPL and the India-West Indies series in the Caribbean in 2011, two years later it sponsored the Super Fight League fronted by Bollywood's Sanjay Dutt and Raj Kundra, and spent Rs 35 crore over four years on Punjab Deputy Chief Minister Sukhbir Badal's Kabaddi World Cup.
While PACL's former CEO, CEO Maj-Gen K.K. Bakshi (retd), reportedly quit just 10 days before the CBI raids began, little is known about Bhangoo's whereabouts and future plans remain as murky as his operations so far.
While reports claim the group may be putting its hotel in Australia on the block for $170 million, PACL has already said that it will be appealing against Sebi's decision demanding that they return all the funds collected so far. And given how delayed litigation has served them so far, PACL may just have some more time left before it reaches the end of its line.

Friday, 8 August 2014

Ponzi scheme nips career of soldier

Greed to make fast buck through money circulation scheme led to his fall
·         Poddar enrolls members in Amway and
·         Starts online campaign to rope in members
·         Pakistan spy induces him with naked photos
  The menace of money circulation scheme has taken its toll on the career of a soldier, Patan Kumar Poddar, who was arrested on Wednesday on charges of enticing people to join a ponzi scheme and in the transaction was honey-trapped by a foreign spy.
Poddar joined a dubious company which has been running a ponzi scheme for the last few years and started enticing his colleagues to join the scheme to make a fast buck. He started posting the business proposals on his Facebook profile. Interestingly, Poddar is also a member of Amway India Enterprises.
His position in the Army attracted the foreign spy who introduced herself as Anushka Agarwal and started flirting with him online. She claimed that she was studying M Sc in Jhansi in Uttar Pradesh. She offered to utilise his services for an online survey offering a remuneration of Rs 10,000 to Rs 15,000 per month. She started paying amounts regularly in various accounts of Poddar.
The spy had gone ahead to entertain him and posted her naked pictures and he started giving her a lot of information regarding the movement of field and medium regiments on the Western border and photographs of missile units. She had even sent a link to be installed in his office computer with which she could access any classified information without his knowledge.
The AP High Court had rightly said on the writ petition filed by Amway India way back in 2007 that inducement for aggressive enrollment of new members to earn more and more commission was inherent in the scheme of Amway India.

Subedar confesses to passing on defence secrets 
* Info on top 40 Army officers and their movements in Rajastan shared with the Pakistani Facebook friend
* Army denies he was in EME
* Tight security in Army units in TS, Chennai
* Pakistani mole reported to have transferred Rs 70,000-80,000 to his bank account
 Naik Subedar Patan Kumar Poddar of Army’s EME unit in Secunderabad who was arrested by Central Crime Station on Wednesday reportedly told the police that he had passed on the information of about 40 top army officials and their movements in Rajasthan to his facebook friend Anushka Aggarwal.
In a quick move, the EME on Thursday in a statement said that they had nothing to do with Patan and that he was not in EME.
A top police officer who was investigating the case said that Anushka had introduced herself as a scholar for getting insights into the country’s security details. She sought details of missile storage and other army positions in the country. Patan had revealed details of regiments and artillery centres in Secunderabad.
The police are also investigating the espionage issue and verifying the email and Facebook accounts. Sources said that they had already decoded some of the information on which they could lay their hands on.
Speculations were rife during day that National Intelligence and Army Intelligence agencies had sought the custody of Patan but police said that they had not received any such requests. If they wish to get his custody they have to approach the Court. “It is our case and we shall handle this,” said an Assistant Commissioner of police.
Police denied that Rs 10 lakh was transferred by Anushka to the account of Patan. They claim that about Rs 70,000-80,000 was transferred to his SBI account in Kolkata.
It is said that following  Patan’s revelation of sensitive information to Anushka  the security at the Army units of Telangana and Chennai had been beefed up. All the important units were shuffling their personnel in the region, sources added.