Pancard Club Limited (PCL) is a Mumbai-based company that became operational in 1990. PCL owns and runs a big hotel chain and engages in activities such as the development and maintenance of clubs, hotels, and resorts. Despite delivering on its promises for more than a decade, Pancard Club was under the scanner for soliciting money from the general public. During an investigation, it was found that the company mobilized money under its various holiday schemes and programs. It allegedly duped millions of investors between 2002 and 2014 through various holiday packages and collective investment schemes (CIS).
| Name Of Company | Pancard Clubs Limited |
|---|---|
| Famous For | operates a chain of hotels & Bars |
| Founded Year | 1992 |
| Company For Security | Securities and Exchange Board of India |
| Well known as | SEBI |
| Services Provided By Pancard clubs ltd | Development and Maintenance of Recreation Clubs, Resorts, And Hotels |
| News Coming Out | Bankruptcy court admits that Process against Pancard Clubs Ltd Insolvency Resolution Process |
| Beneficiary | Investors |
| Official Website | www.cirppancardclubs.com |
| Address of the registered office and principal office (if any) of the corporate debtor | 111-113 Kalyandas Udyogbhavan, Near Century Bhavan Prabhadevi Mumbai 400025 |
| Last date for submission of claims | September 23, 2022 |
| Names of Insolvency Professionals identified to act as Authorised Representatives of creditors in a class (Three names for each class) | 1. Mr. Devang Subodh Thakar 2. Mr. Vithal Madhukar Dahake 3. Mr. Prakash V Kukreja |
Pan Card Club Limited- Nature of Business
Pan Card Club (PCL) is engaged in the timeshare, hospitality, travel, and tourism business. The company owned 30 hotels, including many 5-star hotels across the country and abroad.
Founders and Directors of Pancard Club Limited
Sudhir Shankar Morvekar was the founder and promoter of Pancard Club Ltd. He passed away in 2017. The other directors of the company include Usha Arun Tari, Chandrasen Ganpatrao Bhise, Shobha Ratnakar Barde, Manish Kalidas Gandhi, and Ramachandran Ramakrishnan.
Shobha Ratnakar Barde and Chandrasen Ganpatrao Bhise are non-executive independent directors and have no role in the management of the company.
What was the PCL’s strategy to collect money?
Pancard Clubs allegedly raised money from investors by enrolling members in a holiday timeshare program that gave them a share of vacation time at company-owned tourist properties. The membership, holiday packages, and insurance benefits were actually a disguise for a collective investment scheme that offered members a guaranteed return.
Total assets of the Pancard Club
After probing, SEBI attached a total of 34 properties and froze 250 accounts of the company and its directors. The company’s assets and properties were spread across India, including Maharashtra, Goa, Gujarat, Haryana, Madhya Pradesh, Rajasthan, Kerala, Karnataka, Tamil Nadu, Uttarakhand, and West Bengal.
Till now, a total of 91 properties have been seized, whereas 334 bank accounts have been frozen.
Number of investors and money raised by the Pancard Club Limited
Pancard Clubs raised Rs 7,035 crore from more than 51 55,516 investors.
Pancard Club Limited- Scam busted, and SEBI’s reaction
In a crackdown in 2010, it was found that Pancard Clubs raised funds for over Rs. 7000 crores from around five million individuals under its holiday scheme. During an investigation, the Securities and Exchange Board of India (SEBI) found that the company was running an unregistered collective investment scheme (CIS) without complying with the provisions of the Companies Act, 1956. PCL allegedly defraud investors between 2002 and 2014. The holiday packages were a cover-up for an investment scheme that promised a fixed return to the members.
On 29th February 2016, SEBI ordered PCL to return investors’ money within three months from the order date. The company has failed to comply with SEBI’s directives. In this matter, the Serious Fraud Investigation Office (SFIO) had even asked the National Company of Law Tribunal (NCLT) to freeze companies’ assets along with the bank accounts of directors/promoters.
In 2014, the capital markets regulator SEBI asked the company and its directors to wind up their existing schemes. Securities and Exchange Board of India ordered Pancard Clubs and its directors and promoters not to collect any fresh funds or to launch any new schemes or companies.
Pancard Club Ltd. Scam- Timeline of all the events
| Date | Event |
|---|---|
| 2010 | SEBI examined PCL’s documents and found that the company’s share capital stood at Rs 5 lakh, while it mobilized over Rs. 7000 crores under its holiday schemes. |
| July 31, 2014 | SEBI asked PCL and its directors not to collect any fresh funds from investors and not to launch any new schemes. |
| November 2015 | Securities Appellate Tribunal (SAT) asked PCL to return investors’ money. |
| 29th Feb 2016 | SEBI asked PCL to provide the full inventory list of all the company’s assets and properties held by its directors. SEBI asked the company to return investors’ money within 3 months of the order. However, the company failed to comply with the directives. |
| May 2017 | SEBI closed down PCL’s office located at Prabhadevi in Central Mumbai. |
| June 2018 | SEBI managed to sell two properties (one in Panvel for Rs 68.09 lakh and the other in Mumbai for Rs 1.34 crore) of Pancard clubs and two cars through a public auction. |
| January 10, 2019 | Many investors filed a writ petition in the Bombay high court alleging that SEBI has unvalued PCL’s assets while setting a reserved price for the auction. Following this, SEBI was restrained from auctioning PCL properties. |
| March 26, 2021 | SEBI fined PCL and its independent and non-executive directors with a penalty of Rs 20 crore. |
| August 2021 | Bombay high court granted anticipatory bail to two directors of Pancard Club- Shobha Barde and Chandrasen Bhise. |
| 17th August 2022 | Serious Fraud Investigation Office (SFIO) registered an application that was not heard by the NCLT. |
How SEBI is protecting investors’ money?
After thoroughly looking into the matter, on 22nd February 2018, the securities markets regulator issued a notice for the sale of PCL’s immovable properties. SEBI had e-auctioned companies’ properties in Mumbai, Udaipur, and other places. The assets and properties listed for auction include office spaces in Mumbai, a hotel in Thane, and a resort in Udaipur. However, the market regulator has been unable to auction all the PCL properties.
SEBI initially began the process of auctioning 14 properties of Pancard Clubs to refund investors’ money, fearing that the insolvency proceedings will hamper the sale of properties. However, due to the stay granted by the Bombay high court, SEBI is currently unable to auction any of PCL’s properties.
Pancard Club Refund Process- How it will start?
Individuals who have invested their money in Pancard Club will be glad to know that the refund process of the company will be soon initiated by the National Company of Law Tribunal court. The court has set the Insolvency Resolution Process (IRP) in motion for that. A detailed notice containing the same information has been published in Loksatta on 12th September 2022.
How to apply for a refund?
Investors/depositors of PCL are requested to submit their claims with proofs online by 10th December 2022 on the company’s official website. Creditors may also present their claims in person, by electronic media, or by post.
Investors of PCL can furnish the receipt of documents and KYC certificates. A scanned copy of the Aadhar card, PAN Card, canceled check/first page of the bank passbook, member certificates, and 6 months’ bank statements from the maturity date must be uploaded on the claim form before 10th December 2022. Investors can apply for their claim on pclcirp.cirrus.co website. After the verification, the refund process will be initiated.
The step-by-step process to file a refund claim is as follows:
Step 1: The claimant has to search pclcirp.dcirrus.co in any browser
Step 2: Once you click enter, the Resolute Login page will appear
Step 3: Enter your email ID and mobile number and fill in the Captcha as displayed on the screen
Step 4: Click the Next button and enter the OTP (Time Password) that you will be
receiving on your mobile and Click the Submit button
- After verifying OTP, the Claim Form will open
- Refer to the claim filed by a claimant as displayed on the screen
Step 5: Choose any one Identification Proof from the dropdown options:
- PAN
- Adhaar
- Passport
- Voter ID
Step 6: Enter the Identification Proof Number
Step 7: Upload the Identification Proof document. (PDF, JPG, PNG, JPEG) supported
Step 8: Enter Folio Number
Step 9: ENTER THE FOLLOWING
- PRINCIPAL AMOUNT
- TOTAL CLAIM AMOUNT
- EXPIRY OF MEMBERSHIP
- SURRENDER VALUE
- MEMBERSHIP NUMBER
Step 10: Enter From Name(Claimant’s Name)
Step 11: Enter Address (Claimant’s Address)
Step 12: Now fill under the RELEVANT PARTICULARS
1. Name of the Financial Creditor,
2. Identification number and
3. Address and
4. Total amount columns will be captured automatically since you have already filled them earlier
5. Mention all the Details of documents to which debt can be submitted
6. Mention details of how and when debt incurred
7. Mention (if) there are any mutual dues that may be set off against the claim
8. Mention (if) there’s any security held
9. Mention Details of Bank Account –
- Bank Name
- Account Number
- IFSC Code
- Bank Address
10. Mention the list of documents that you’ll be attaching with this claim. The Claimant filing a claim
11. Choose any one Authorised Person from the dropdown Profiles are updated on the website
www.cirppancardclubs.com
Step 13:Fill your name in Block Letters
Step 14: Mention the relation with the Creditor
Step 15: Fill out your address declaration, which can be filled out after taking a printout of the form.
Mention the Date and Place and sign the Declaration
Step 16: In verification, after taking a printout of the form, fill in the Place and Date
of the claim filed.
Step 17: Click on Download, Print, and Sign, and fill in all the above details
Step 18: Once the form is filled and signed, scan the form and upload the document
1. Signed Form and Declaration
2. Proof of Debt/Payment (Bank Statement)
3. Upload Membership Certificate
4. Upload Proof of Interest (if any) Claimant filing a claim
5. Upload other Attachments (if any)
Step 19: Click on the UPLOAD AND SUBMIT CLAIM button, and your claim will be submitted.
You’ll receive a confirmation email stating you have successfully submitted the claim.
Latest updates on the matter of Pancard Club refund status
As per the latest updates, the National Company of Law Tribunal (NCLT), on 9th September 2022, announced the initiation of corporate insolvency proceedings for Pancard Club Limited. For further probe and investigation, Mr. Rajesh Sureshchandra Sheth has been appointed as the Interim Resolution Professional according to the NCLT order.
Pancard Clubs, with ₹5,034 crore of admitted claims in a bankruptcy resolution, has received three offers from Ashdan Properties, a consortium of Vijay K. Oswal, Shanti Hospitality, and Kantadevi V. Oswal, as well as Chemhub Tradelink.