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With his two-decade-old realty-based collective investment scheme empire on the brink of a shutdown after a multi-agency probe, Pearls group founder Nirmal Singh Bhangoo, it seems, is looking at greener pastures in the bustling e-commerce space. Even as a Supreme Court-ordered probe by the Securities and Exchange Board of India (Sebi) was underway, a few of Bhangoo's trusted lieutenants broke away to form Besmech Merchandise Ltd (BML). Bhangoo's daughters Barinder Kaur and Sukhwinder Kaur hold significant stake in the venture, which is led by Jyoti Narain, former chief executive of PACL. Narain is the whole-time director of the new entity.
When PACL had come under regulatory attack in 2011, Narain had vehemently defended the group's business model on TV channels.
Filings showed the groundwork for BML's launch began days after Sebi issued a show-cause notice against PACL and its directors, including Bhangoo, on June 14, 2013. BML was incorporated on August 28, 2013.
The company broadly described its area of operations as "other business activities" and its memorandum included a wide range of objects, leaving its scope of operations wide open. An analysis of the company's online footprint suggested it would largely operate in the apparel retailing segment. Its website, www.besmech.com, mentioned sarees under the Charulekha brand and western wear label Abhirupa. It also suggested the company was present in the ethnic wear and accessories space.
Curiously, the website had a provision for "member log-in", a feature of many agent-driven schemes. Its Facebook page said it operated in "retail and consumer merchandise".
The firm was listed as a seller on popular e-commerce site snapdeal.com. "Buy men's clothing at the Besmech Merchandise store on snapdeal.com. Get best prices, free shipping, cash-on-delivery and easy monthly instalment options," said a post on SnapDeal.
SnapDeal did not respond to an email questionnaire seeking details about its arrangement with BML.
Those tracking the group said BML had been hiring people with experience in the retail and apparel segments, at all levels. Filings with the Ministry of Corporate Affairs showed Barinder Kaur and Sukhwinder Kaur owned 35 per cent stake in the venture. Both have mentioned a farmhouse in South Delhi's Satbari area as their address.
Five others - Harsatinder Pal Singh Hayer (17.5 per cent), Gurpartap Singh (17.5 per cent), Suresh Kumar Bareth (10 per cent), Vipan Sood (10 per cent) and Jyoti Narain (10 per cent) - held the remaining stake. All except Narain hold board positions in group entities such as Pearls Sports Ventures, Pearls Infrastructure Projects, Pearls Buildcon, Pearls Buildmart, Pearls Finlease and Pearls Easy Home.
An email sent to Pearls group executives on Wednesday, seeking details on their relationship with the new entity, remained unanswered.
Besmech's launch seems to have come under close scrutiny of the registrar of companies, owing to the backgrounds of the promoters. Bareth and Sood, initially designated at promoter directors, had to provide affidavits saying they wouldn't indulge in money circulation or pyramid schemes through the entity. "I, Suresh Kumar Bareth, son of Ganga Dhar, promoter director of the proposed company, hereby declare the said company will not carry any money circulation scheme or accept any deposits from public or be involved in any multi-level or pyramid scheme, subject to appropriate prior approvals/licences from regulating authorities," the affidavit dated July 2, 2013, said.
Sood filed a similar affidavit.
It is unclear whether and how the new enterprise will be able to leverage the Pearls group's huge office and agent network. Its strategy, it appears, is similar to that of the Sahara group which, when faced with regulatory heat, had ventured into cooperatives and retail, say investors familiar with the segment.
Mails to Narain and Besmech's official mailing address (according to corporate affairs ministry records) on Wednesday, seeking details of the new venture, did not elicit any response. A mail to Bareth's official email address bounced.
In the months following the incorporation, Sood resigned from the board.
The Bhangoo family's connection with Besmech isn't limited to the shareholding. A lease agreement filed with the corporate affairs ministry in February this year showed Bhangoo and his wife Prem Kaur, both residents of Gurgaon, had leased out a 2,800-sq ft office space in the Hari Nagar area here to Besmech for a monthly rent of Rs 2.5 lakh. The lease agreement added the company would pay an upfront deposit of Rs 2.5 lakh each to Bhangoo and Kaur.
For a fledgling firm with authorised and paid-up capital of Rs 5 lakh, that would have been a big ask.
