“It was hard-earned money that I invested because agents for PACL in my village convinced me I would get good returns. The investment matured last year, but there is no trace of the 270,000 rupees ($4,339) he put in, never mind the promised returns that were supposed to double his money. Hoping to raise money for his daughter’s wedding, he placed a third of his savings into an investment scheme run by property developer PACL in 2007. That is cold comfort for retired Indian army officer KL Sharma. In most cases, it cited the court order against Sahara in support of its action. So far this year, the Securities and Exchange Board of India (SEBI) has barred more than 70 firms that raised funds through debentures or collective investment schemes, promising returns from cash put in land, cattle and even holiday homes. Patchy oversight in India means countless illegal investment schemes continue to emerge, however, often in the villages. Now its boss is in jail for more than a year and some staff say much of its business is threatening to stall, after it raised billions of dollars from investors by selling bonds that were ruled to be illegal. At its height, it was one of India’s biggest business empires, stretching from Formula One motor racing to New York’s Plaza Hotel. Sahara began as a scheme for small depositors, but it grew over decades with investment plans that critics say were designed to avoid regulatory scrutiny.
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