Pancard clubs: Bankruptcy court admits Pancard clubs to insolvency resolution process

An insolvency court on Friday admitted Pancard Clubs Ltd into the corporate insolvency resolution (CIRP) process based on a joint petition filed by around 100 shareholders and appointed Rajesh Sureshcandra Sheth as Interim Resolution Professional (IRP).

The petitioners have invested around Rs 1.55 crore in a timeshare holiday scheme offered by the company, called CIS Holiday Time Share Scheme. The company is estimated to have raised about Rs 7,035 crore under the said scheme.

In admitting the complaint, the Mumbai bench of the National Company Law Tribunal (NCLT) noted that the financial creditors had disbursed the money on the basis of time value, which means that in this case, the plaintiffs would receive a higher value to the amount invested. , which is a sign of financial debt.

“It is established by the claimants (investors) that the respondent (Pancard Clubs) failed to honor the contract, hence the reimbursable amount is in default,” said Bench Judge PN Deshmukh and Technical Member Shyam Babu Gautam, in his Order of 15 pages. “The debt and the default are established and there is no reason to deny the admission of the petition.”

Before this lawyer, Nausher Kohli, appearing for investors, argued that the modus operandi of the program launched by the company was that an investor would part with a certain amount of money with the possibility of using overnight stays in the various properties of holidays from the Pancard clubs or alternatively to receive a return on investment after a period of 3.5 or 7 years.

Opposing this plea, Sebi, through his lawyer, argued that if the company was admitted under the insolvency resolution, it would cause a delay in the recovery and auction of assets. previously initiated by the capital markets regulator.

However, contradicting these arguments, counsel for the claimants argued that Sebi could not oppose the admission of this claim under the Insolvency and Bankruptcy Code (IBC) against Pancard Club Ltd because, in If there is a conflict between two laws, the code takes precedence over Lois Sebi.

Earlier, in February 2016, the financial market regulator Securities & Exchange Board of India (Sebi) ordered Pancard Clubs to repay an amount of Rs 7,035 crores to investors after finding that the program launched by Pancard Clubs was of the nature of a collective. Investment plan without proper registration with Sebi.


Comments are closed.