SEBI on Thursday reduced its fine on PACL and its promoters by 66 per cent to ₹2,423 crore, but even this sum represents the highest penalty slapped by the capital market regulator.

In an order issued on Thursday, SEBI said its investigations had found that PACL directors Tarlochan Singh, Sukhdev Singh, Gurmeet Singh, Subrata Bhattacharya and certain other past directors had mobilised funds from the general public via collective investment schemes (CIS) without obtaining registration from the regulator.

Earlier, in 2015, SEBI had imposed a penalty of ₹7,269.5 crore on PACL, saying the company deserves the “maximum penalty” for such “large-scale duping” of the common man. PACL challenged SEBI’s order before the Securities and Appellate Tribunal (SAT), which asked the regulator to pass a fresh order.

PACL’s argument

PACL had argued that even “assuming the appellants had committed fraudulent and unfair trade practices, the penalty under Section 15HA of SEBI Act that could be imposed on appellants was ₹25 crore or three times the amount of profits made out of such practices, whichever is higher.”

The SAT order said: “It is submitted that in the present case, without computing the profit, if any, the adjudicating officer has imposed penalty on the appellants which is bad in law.”

SEBI found that the group collected ₹49,100 crore via unauthorised means over a period of 15 years, which the regulator said, should be returned to investors.

SEBI’s most recent order is limited to a penalty equivalent to the profits made through the illegal mobilisation, the 47-page order said.

A crackdown on CIS first began after the now-infamous Sahara case. The Subrata Roy-led group is alleged to have mobilised more than ₹50,000 crore of public money through various unauthorised schemes.

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