Indian regulators have slapped a $1.1 billion fine on a New Delhi real estate company which raised at least $8.3 billion from 58 million investors who believed that they were buying land.
In its order against Pearls Agrotech Corporation, the Securities and Exchange Board of India said it hoped the heavy penalty would "give a strong message" to those running schemes preying on unsophisticated Indians trying to parlay hard-won savings into greater wealth.
"In the recent past, the country has suffered a lot in [the] hands of entities who engage in such illegal money mobilisation under various schemes, wherein the hard-earned money of the common man has been duped," the order read.
Pearls, which began operating in the late 1990s, raised money from people who thought they were buying valuable plots — which the company promised to develop and sell on, ostensibly generating lucrative returns.
But investors — lured through a network of agents who received commissions of up to 35 per cent — were often assigned vaguely defined plots in regions far from where they lived, leaving them unable to check out the realities on the ground.