Every day you must be hearing about some scam or the other. Some are related to the stock market and some to investment. People get caught in these scams because every time the method of scam is different, which looks absolutely true. One such scam was done by Pearls Group founder Nirmal Singh Bhangoo. Under this, about 5.5 crore people were duped of more than INR 50 thousand crores. To carry out such a big scam, the help of 70 lakh agents was taken across the country. Recently, after Bhangu’s health deteriorated in Tihar Jail, he was admitted to Deen Dayal Upadhyay Hospital in West Delhi, where he died on 26 August 2024. Let us know how a milk seller did a scam of INR 50 thousand crores.
The PACL i.e. Pearl Agrotech Corporation Limited scam was carried out by milk seller Nirmal Singh Bhangu. It was a pyramid scheme fraud, in which people were promised huge returns. In this, people were asked to invest money in this company. The company had said that with the money people are investing in it, land will be bought in their name. The company claimed that the land would be developed for agricultural and commercial use. After this, it was said to be sold at a huge profit. The company said that the profit made from this will give people a strong return.
A receipt was given in the name of land papers
The company did not show any sale deed or property papers of the land it was buying. People would get only a receipt, which was actually nothing more than a piece of paper. The company would tell people that it would buy land in any part of India. Anyway, people did not care much about it either, because the company promised people a fixed return. According to the company, people could either take their returns or their land after 5 years. People would focus only on the returns. The company was also promising fixed returns. A promise was made to multiply the money 4 times in 10 years.
Who was Nirmal Singh Bhanghu?
The owner of Pearls Group, Nirmal Singh Bhanghu, was a resident of Barnala district of Punjab. It is said that in his youth, he used to sell milk with his brother on a bicycle. During this time, he also did post-graduation in Political Science. After this, he went to Kolkata in the 70s in search of a job. Where he worked for a few years in a famous investment company Pearless. After that he started working in Golden Forest India Limited, a Haryana based company which duped investors of crores of rupees. After the closure of this company, Nirmal Singh became unemployed.
This is how this Ponzi scheme was running
This was a Ponzi scheme, so it was run in the same way. In the beginning, the company also gave huge returns to some people, due to which people started talking about the company everywhere. Under the Ponzi scheme, the company was giving returns to the old investors from the money of the new investors. Seeing the huge returns, more people also started investing in it. To make this scam bigger, the company started a pyramid scheme, under which everyone had to add 2 people under them. The company was giving huge commissions to the agents, due to which people kept adding their friends and relatives. Many seminars were also organized by the company to lure people, in which the company used to tell about itself and the benefits of investment.
People were misled about the company
The company also used to say that it has been working since 1983, but it was not so. The company was started in 1996. Another company of Pearls Group, PGF, was started in 1983. To win the trust of the people, they said that if you are worried about what will happen if the company closes down, then you can go to the Ministry of Corporate Affairs with the receipt you have received. This is a private limited company, which is registered on MCA. However, that receipt had no meaning.
And then the complaint reached SEBI
During 1998-99, SEBI was receiving many complaints about such schemes, due to which SEBI made a rule. The name of this rule was Collective Investment Scheme Regulation. Under this, money is collected from people and is used for the purpose for which it has been taken. After this, the returns received from it are distributed among the people. SEBI found that both PACL and PGF were not following CIS Regulation. In such a situation, SEBI asked both the companies to close down and return the money of the investors to them.
Challenged SEBI in court
After this, both the companies went to court. PGF went to Punjab High Court and PACL knocked the door of Rajasthan High Court. Punjab High Court directed PGF to close the business for not following SEBI rules and regulations. However, no action was taken by the court against the promoters of the company. Both the companies used to talk about buying land and giving returns to the people. Large amount of investment was taken in PGF and receipt of big plot was given. Small investments were also taken in PACL and receipt was given for them. In the year 2003, PACL’s scheme was not considered as CIS scheme in Rajasthan and permission was given to continue the business.
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The matter reached Supreme Court, it took 10 years
SEBI went to Supreme Court. On 25 February 2013, Supreme Court said that it is CIS, asked SEBI to investigate and take action against the company. PACL promoters were buying assets for themselves. The company had also started a news channel named P7, through which it used to run its operations and due to this people continued to trust the company. PACL company has also been the sponsor of IPL team Kings 11 Punjab. Cricketer Brett Lee was made the brand ambassador of the company. The matter kept on dragging in the court for a long time, due to which the company kept on collecting money from people rapidly and about 5.5 crore people fell prey to this scam. Most of the people in this were from Punjab, Rajasthan, Haryana and Delhi.
SEBI ordered to return the money of the investors
On 22 August 2014, after investigation, SEBI said that the company should return all the money of the investors, but the company did not do so. After this, the matter again went to ED and it started questioning PACL Chief Nirmal Singh Bangu and started attaching the assets. His property worth about INR 500 crore was found in Australia itself. Apart from this, many more assets were attached and then the refund process was started.
In 2016, CBI arrested Bangu. In the investigation, CBI found 1300 bank accounts, which were suspicious. CBI seized properties worth about INR 280 crore. INR 108 crore was also deposited in Delhi High Court. The agency also seized documents worth about INR 20 thousand crore, whose value was found to be about INR 5000 crore.
Just when SEBI talked about refunds, those who had invested money were also defrauded in the name of refunds. Many investors got calls that they will have to pay a 10 percent charge to get a refund. In this way, many people were defrauded, after which SEBI started a website named sebipaclrefund.co.in and started giving refunds to people. According to this website, the company has so far refunded money to people who had invested up to INR 17,000.