Five days after registering a First Information Report (FIR) against Bhangoo, Singh and the companies, the Central Bureau of Investigation (CBI) said it had found the alleged scam of agricultural land allotment was of Rs 45,000 crore. It said the two had raised money from "over 50-million gullible investors through a collective investment scheme under the garb of sale and development of agricultural land."
The CBI had registered a case of cheating and criminal conspiracy in this matter on the directions of the Supreme Court. Bhangoo and Singh were allegedly running a pyramid scheme through a vast network of commission agents across the country. The agents were being paid hefty commissions for luring investors, according to the agency.
The CBI inquiry indicated the company was raising money by issuing bogus land allotment letters. The probe revealed the PACL, after being directed by the high court of Punjab and Haryana to wind up the scheme and refund investors, had started a similar fraudulent scheme under another company. Funds from the new company were used to pay old investors "to stave off criminal prosecution."
The agency had carried out raids on official and residential premises of the owner and directors of PACL and PGF in New Delhi, Chandigarh, Mohali and Ropar in Punjab and Jaipur last week, seizing huge records and data relating to the deposits from public and misutilisation and diversion of funds.
Capital markets regulator Securities and Exchange Board of India had raised objections to the legality of the PACL's operations. The company was originally incorporated as Gurwant Agrotech in 1996 to sell magnetic pillows and other therapeutical products.