Lost in the Woods

All dreamt that Syal would double their money in three-and-half years, increase it 10-fold in 10 years, and 222 times in 25 years. He took their money and promised them land and dream plantations.

R K Syal presented a calculus of tree plantations and cash crop harvests. His brochures said the company would develop the land for agro-forestry farms and after expiry of the plan period, trees and cash crops would be cut and money from the sale would be guaranteed by post-dated cheques.

He hired 20 lakh agents of which six lakh were operative. These agents got about 24 lakh investors. Taking into account collections from all the schemes as of December 31, 1997, the total maturity amount would have been Rs 22,900 crore.

There were inherent loopholes in the schemes. Forty per cent of the investors’ money was earmarked for ‘‘developing’’ the land and the rest was treated as security deposit. They collected about Rs 3000 crore and paid Rs 450 crore to their investors.

In a report prepared by Sebi’s executive director Vijay Ranjan and his RBI counterpart S Gurumurthy in 1998, the two officers highlighted that the company had paid nothing to investors out of its own income but out of the investment made by new ones. In an investigation carried out by court officers appointed by the Mumbai High Court, the total amount of the farm income was Rs 58 lakh which works out to less that 0.2 per cent of the total amount (Rs 450 crore) paid to the investors. A committee appointed by Mumbai High Court recommended in 1998 that GFIL and its subsidiaries stop collecting money and undergo an audit of its accounts and land holdings.

According to the Punjab Vigilance Bureau, he hived off more than Rs 3,000 crore. He even got a helicopter to fly him to neighbouring places. He got thousands of acres of land in Punjab and Himachal Pradesh. He gave his family and relatives the Big Punjab Dream of a life in London. The investors got nothing.

Now R K Syal is in the Chandigarh prison. His wife Neena Syal, father Amrit Lal Syal, brother Rajesh Syal and sister Pamella Syal are in the Ambala jail, all facing trial in cases ranging from bouncing of cheques to fraud. The luxuries flow regardless. Syal had a lavish lifestyle even in prison. The ambulance that transports him after a hip joint replacement is well equipped: AC, a bed, the works. Cops salute him when he comes out of jail.

On the other hand, there is little hope for investors to get a full refund. They filed numerous court cases to get their money back and wind up the company. The courts put a restraint on the company to sell the properties. But Syal, illegally tried settling claims of some people by giving them some of his properties in exchange for the money he owed them.

Meanwhile, Provisional Liquidator Justice R N Aggarwal (retd) issued public notices on May 22, 2004, for auctioning some of the prime properties of the GFIL in order to pay creditors.