ED launches refund drive for Rs 60 million investors in Pearl Group scam
ECONOMY & POLICY

ED launches refund drive for Rs 60 million investors in Pearl Group scam

The Enforcement Directorate (ED) has launched an initiative to return lost funds to nearly sixty million investors who were impacted by the Rs 500 billion Pearl Group Ponzi scheme.

The agency stated that it had provided details of assets worth Rs 7 billion belonging to Pearl Agro Group to the Justice Lodha Committee. This committee, appointed by the Supreme Court, is responsible for overseeing the sale of seized assets and the restitution of funds to the scam’s victims.

The Securities and Exchange Board of India (SEBI) had previously banned Pearl Group for "illegally collecting Rs 491 billion from 59 million investors over a span of 18 years." The investigation began a decade ago, following the Central Bureau of Investigation’s (CBI) registration of an FIR in February 2014.

According to ED’s investigation, the promoters of Pearl Group had created a Ponzi scheme, promising investors land allotments but instead diverting the funds into shell companies registered in Kolkata. These funds were then withdrawn in cash and sent to Dubai through hawala channels. The money was subsequently invested in several countries for purchasing hotels and resorts. The money trail uncovered a significant investment in property acquisitions in Australia. In 2018, after successfully linking these illegal profits to PACL and its promoter Nirmal Singh Bhangoo, the ED attached two properties in Australia valued at Rs 4.62 billion. Four years later, assets worth Rs 2.44 billion linked to the group and Bhangoo’s associates were also seized in India.

The total value of these assets, some of which are held as financial instruments, may now exceed Rs 10 billion. The investigation is still ongoing, and last week, the ED conducted searches across 44 locations in Delhi, Haryana, Punjab, Maharashtra, Telangana, Karnataka, West Bengal, Rajasthan, and Uttarakhand, tracing the proceeds of the crime.

The Enforcement Directorate (ED) has launched an initiative to return lost funds to nearly sixty million investors who were impacted by the Rs 500 billion Pearl Group Ponzi scheme. The agency stated that it had provided details of assets worth Rs 7 billion belonging to Pearl Agro Group to the Justice Lodha Committee. This committee, appointed by the Supreme Court, is responsible for overseeing the sale of seized assets and the restitution of funds to the scam’s victims. The Securities and Exchange Board of India (SEBI) had previously banned Pearl Group for illegally collecting Rs 491 billion from 59 million investors over a span of 18 years. The investigation began a decade ago, following the Central Bureau of Investigation’s (CBI) registration of an FIR in February 2014. According to ED’s investigation, the promoters of Pearl Group had created a Ponzi scheme, promising investors land allotments but instead diverting the funds into shell companies registered in Kolkata. These funds were then withdrawn in cash and sent to Dubai through hawala channels. The money was subsequently invested in several countries for purchasing hotels and resorts. The money trail uncovered a significant investment in property acquisitions in Australia. In 2018, after successfully linking these illegal profits to PACL and its promoter Nirmal Singh Bhangoo, the ED attached two properties in Australia valued at Rs 4.62 billion. Four years later, assets worth Rs 2.44 billion linked to the group and Bhangoo’s associates were also seized in India. The total value of these assets, some of which are held as financial instruments, may now exceed Rs 10 billion. The investigation is still ongoing, and last week, the ED conducted searches across 44 locations in Delhi, Haryana, Punjab, Maharashtra, Telangana, Karnataka, West Bengal, Rajasthan, and Uttarakhand, tracing the proceeds of the crime.

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