 "Nirmal Singh Bhangoo")
Nirmal Singh Bhangoo, founder of the Pearls group, and his immediate relatives controlled significant shareholding in two of the three main parent companies of PACL Ltd.
These details fly in the face of the 61-year-old’s claim that he was only an ‘advisor’ to the company that has been asked by the Securities and Exchange Board of India (Sebi) to refund Rs 49,100 crore raised from 58.5 million people. He had told Sebi its showcause notice was "wrongly issued" to him.
Though media reports widely identified Bhangoo as the face of the group, it was not clear what the legal relationship was between him and the particular legal entity facing regulatory action. Business Standard has analysed various filings of PACL, its parent companies and last week’s Sebi order, to unearth a direct and live connection between PACL and Bhangoo.
Detailed questionnaires seeking ownership details of the firm, sent to PACL executives, did not elicit a response. The latter did not want to add to the official statement of assurance to investors and that the company would move the Securities Appellate Tribunal against the Sebi order.
The PACL annual report names three corporate entities as its top shareholders. These were Singh and Singh Township Developers, Yashika Finlease and Alarming Finvest, which held close to a fifth of the total shareholding.
Singh and Singh Township was 50 per cent owned by Parminder Singh. Nachattar Singh, elder brother of Nirmal Singh Bhangoo, is named as “father/husband” of Parminder Singh. Beside, both Yashika and Singh & Singh operated out of the same address, 'B1/5, Paschim Vihar, New Delhi.'
However, according to the Sebi order, “Mr. Nirmal Singh Bhangoo vide his letter dated July 25, 2013, has submitted that he was associated with PACL for a short span of time, i.e. from June 03, 1996 to February 03, 1998. He never sponsored or caused to be sponsored or carried out any CIS (collective investment scheme) and was associated with PACL only in the capacity of non-executive director, and his role was limited only to the extent of providing valuable inputs to the board of directors on the issues concerning the real estate sector."
In a subsequent written submission on June 23, 2014, Bhangoo gave the details as asked for during the personal hearing on May 15. He said he'd started his career by working as an agent for Peerless General Finance Co. And, claimed, “The showcause notice has been wrongly issued to him, as he has ceased to be a director of PACL in the year 1998, i.e. prior to the coming into being of the CIS Regulations.”
Further, that apart from being associated with PGF Ltd, he trades in real estate in his individual capacity by buying and selling properties. He draws a salary from PGF and also earns a living from the income derived from such trading of property. From the income tax returns for the past three assessment years (2011-2012 to 2013-2014), his average yearly income is Rs 10-11 crore, according to the Sebi order.
“In the year 1983, he had promoted one PGF Ltd and had worked as its chairman and managing director. It has also been said that due to his knowledge and experience with regard to agricultural land and real estate business, he was invited to join the board of PACL as an advisor. Thereafter, during the period of 1996-1998, he was attached to PACL as an advisor,” is what Sebi says it was told by Bhangoo.
