Mohali: Investors left in the lurch after multi-crore scam hits Pearls group

The licence issued by the Greater Mohali Area Development Authority (GMADA) expired in January this year following a notice issued to the company in March.

Written by Jagdeep Singh Deep | Mohali | Published: August 7, 2016 4:30:57 am
View of the Pearls city project at SAS Nagar on Saturday, August 6, 2016. Express photo by Jasbir Malhi The Pearls city project at SAS Nagar . Express photo by Jasbir Malhi

In 2014, Pearls Group, highly trusted by investors, was given a three-year licence to develop Sectors 100 and 104 in Mohali. But the trust was soon shattered, as the money they had invested in the project got stuck, as the project got mired in several controversies and several criminal cases were registered against the group’s owner.

The licence issued by the Greater Mohali Area Development Authority (GMADA) expired in January this year following a notice issued to the company in March. The authority also issued a warning stating that if it failed to meet the deadlines, their security deposits amounting to Rs 2.5 crore will be forfeited.

The investors alleged that the developer, a sister company of Punjab Agrotech Corporation Limited (PACL), has left around 1,800 investors in the lurch.

Things were going quite well for the company despite complaints that it was slow in carrying out development works in the sectors. But trouble began for investors, when the Central Bureau of Investigation (CBI) booked the group’s CMD Nirmal Singh Bhangoo and other promoters and directors including Sukhdev Singh Bhangoo in a Rs 45,000-crore money laundering scam.

The CBI and the Securities and Exchange Board of India (SEBI) later ordered that all the bank accounts of the company be freezed. The development works stopped following which the investors approached GMADA, but the authority refused to take up development work.

The Pearls Group decided to allot plots in these two sectors initially at Rs 12,000 per square yard, but the rate was later increased to Rs 30,000 per square yard. Both these sectors have 700 plots ranging between 150 and 500 square yard.

While explaining the entire case, Kulbeer Singh Sidhu, president of Mohali Pearls Residents Welfare Association, said, “There are around 1,800 persons who have invested in the project. But after the work stopped, their fate is left hanging in balance.”

Sidhu added: “Recently the investors were called by Justice (Retd.) RM Lodha Committee which is probing the case and were asked to prove the ownership of their properties in these sectors. Out of 1,800 investors, around 225 people have the registered deeds (96 in Sector 100 and 130 in Sector 104) while majority only have the Letters of Intent (LoIs), which are not considered a legal document to prove the ownership. In such a case what can these people do? They will not be able to get ownership of their plots for which they had paid lakhs.”

Claiming GDMA should take up the development work of the sectors, another investor told Chandigarh Newsline, “GMADA issued the licence to the developer. If for any reason, the developer isn’t able to complete the project, GMADA should take over and develop these sectors. But unfortunately, it has not happened till date. What is the investors’ fault? They lost their hard-earned money and did not even get the plots.”

GMADA officials, have, however, distanced themselves from the project.

“We wish that the matter is amicably resolved. Supreme Court is dealing with the case now. Thus, we can not say anything beyond that. Whatever is possible on our part, we are doing it,” a senior GMADA official told Chandigarh Newsline, requesting anonymity.

The company, however, has a different story to tell. One of the directors, Sehajpal Singh, when contacted, said they have already submitted all the details of their project to the Lodha Committee. He also claimed that they have given the possession of property to many investors and development works were also completed in two residential sectors.

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