Austrade had launched in February 2016 last year what the federal government said would be a detailed investigation into the agency’s promoting of the now collapsed A$10 billion Pearls Group scam, despite Indian authorities having been investigating it for more than a decade. Funded by the government, Austrade says it conducted no due diligence on any of the Australian companies it promoted overseas, or on the foreign companies it pushed to local businesses, according to the Report today in The Australian.
Austrade has reportedly failed to produce any details of that investigation but a spokesman said the agency had reviewed its records of its dealings with Pearls. Additional guidelines related to eligibility checks have been ostensibly implemented now, including the criteria upon which decisions are based.
In March 2009, Austrade introduced Gold Coast property developers Paul Brinsmead and Peter Madrers, whose Resort Corp property group had then just collapsed with debts of $300m, to Pearls Group in India. They formed an alliance called Pearls Australasia with Pearls and using its funds, bought the Sheraton Mirage Resort on the Gold Coast for A$62m, spending a further $20m on refurbishments.
The Sheraton Mirage is currently in the process of being sold, with an asking price of A$140m. A class action buy about 46,000 Indian investors against Mr Brinsmead and Mr Madrers is in the court over the proceeds of this sale, according to report.
‘Pearls, run by an Indian businessman Nirmal Singh Bhangoo who was jailed last January, raised A$10bn from an estimated 50 million investors under the guise of selling land parcels which often did not exist, before it collapsed spectacularly’. According to a Report in Mail Today exactly a year ago, on January 10, 2016, ‘Probing a Ponzi scheme worth Rs 45,000 crore referred to as the Pearl scam for the last two years, Central Bureau of Investigation (CBI) has identified properties worth Rs 5,000 crore across the country and scrutinising investments in Australia amassed by Nirmal Singh Bhangoo, the arrested owner of Pearl group. Investigators say they are scanning over 20,000 documents related to properties in Punjab, Haryana, Delhi and Maharashtra. Sources said it is estimated that the properties could be worth Rs 1.85 lakh crores in terms of current market rates.’
The various Annual Reports of Austrade show that Pearls was a key partner in the government agency’s Business Club Australia program in Delhi. This program coincided with the Commonwealth Games in October 2010 in Delhi and was held “within the purpose-built marquee on the high commissioner’s lawn”, according to The Australian.
Also to be introduced to Pearls at the Delhi event was South Australia’s Barossa Valley wine group Wolf Blass. Many wine importers and journalists including Subhash Arora, Editor of this newsletter delWine were invited to attend what was purported to be the ‘Launch’ of Wolf Blass wines by Pearls. In its annual report, Austrade also referred to Pearls as an “Indian wine distributor” and adds that Pearls launched the Wolf Blass label into the Indian market. Treasury Wine Estates, the parent company of Wolf Blass has apparently not commented so far but as is already known in the Indian market, the partnership was short-lived.
PACL (Pearls Agrotech Corporation Ltd), earlier known as Pearls Agencies, started the wine import business in late 2007 with Buller Wines from Victoria, Australia but did not succeed in penetrating the market. It was the only label in the portfolio of Pearl Wines, the firm promoted to distribute imported wines in the fiercely competitive Indian wine market.
‘Sources say close to A$150 million amounting to over Rs 650 crores were stashed away to Australian companies linked to Bhangoo who is accused of running a Ponzi scheme giving land guarantee to lure investors who paid a certain amount of money. It is estimated that over 5 crores investors were conned in the pyramid scheme.’
Bhangoo was granted bail on February 29, 2016 and the case proceedings are on.