About two years after the Central Bureau of Investigation (CBI) lodged a case against two Pearls Group real-estate firms for allegedly raising Rs 45,000 crore fraudulently from 5.5 crore investors via collective investment schemes, the agency on Friday arrested four of their top officials, including chairman-cum-managing director (CMD) Nirmal Singh Bhangoo.
The four officials were arrested after their examination at the agency’s Delhi headquarters, in which they allegedly gave “contradictory and inconsistent responses on key queries,” according to a CBI source. Since the filing of the case, these are the first arrests made in the probe by the CBI.
Bhangoo is the CMD and promoter-director of one of the two Delhi-based firms, Pearls Golden Forest Limited (PGF), and a former chairman of the group’s Australia-based arm Pearls Australasia Pty Limited. The others arrested by the agency are Sukhdev Singh, managing director and promoter-director of the other accused firm, Pearls Agrotech Corporation Ltd (PACL); Gurmeet Singh, executive director (finance), PACL; and Subrata Bhattacharya, a PACL executive director; according to CBI’s press information officer RK Gaur.
The agency had in February 2014 registered a first information report (FIR) against the two firms and eight of their top officials, including Bhangoo, on charges related to criminal conspiracy and cheating. The probe revealed that the firms were allegedly running collective investment (ponzi) schemes under the garb of sale and development of agricultural land in an unauthorised manner.
“The probe revealed that the firms were working as non-banking financial companies without requisite approvals,” said the source. The source added, “The inquiry found prima-facie evidence of the accused firms having raised investments by issuing bogus land allotment letters to induce the investors.”
In searches carried out by the agency, it had recovered allegedly “huge records and data on deposits from the public, misutilisation and diversion of funds, the CBI had said. “On being directed by a court to wind up the scheme and refund the investors, a similar fraudulent scheme was operated under the name of one of the accused firms based in Delhi,” the source further said.
“Funds collected from new investors of the firm were allegedly used to repay the earlier investors of the other accused firm to stave off criminal prosecution,” said the source.
Apart from their fraudulent collections, the firms have been under the CBI scanner for alleged irregularities in their operations. The firms have denied the CBI’s allegations. Despite attempts, HT could not contact the firms’ spokespersons.
The agency recovered over 14,000 property documents worth several thousand crores of rupees that showed that in several cases, plots were allegedly booked in the name of multiple investors. “In case the investors would have wanted to sell off the land allocated to them, he or she may have ended in costly litigations,” according to the source.
The group was earlier also allegedly associated with an Indian Premier League (IPL) cricket team and had hired a former Australian pacer as the brand ambassador. The group was also allegedly associated with the sponsoring of international kabaddi tournaments held in the country.