Directors of Amrapali group face ED probe

Directors of Amrapali Group of Companies are being grilled  for defrauding around 49,575 homebuyers and siphoning off their hard-earned money through web of interconnected companies, launched for different housing projects promising them world-class amenities, reports Mudit Mathur

On the green signal of the Supreme Court of India, the Enforcement Directorate has started custodial interrogations of the Directors of Amrapali group of companies. The group had defrauded around 49,575 homebuyers and siphoned off their hard-earned money through web of interconnected companies, launched for different housing projects promising them world-class amenities. A special court at Lucknow on January 23 granted custody of its directors Anil Kumar Sharma and Shiv Priya to the Enforcement Directorate (ED) for interrogation until January 30.

The apex court had allowed the plea of Additional Solicitor General of India on January 13, for granting custodial interrogation of Anil Kumar Sharma, Shiv Priya and Ajay Kumar to the Enforcement Directorate in connection with charges of money laundering who were already in Delhi’s Mandoli Jail for committing fraud and conspiracy.

The custodial interrogation of Anil Kumar Sharma, Shiv Priya and Ajay Kumar has been going on and after expiry of custodial remand, they shall be re-lodged with Mandoli Jail. The cognizable offences against accused Directors surfaced in the specific finding recorded by the Forensic Auditors wherein large-scale fraud unearthed, indicating prima facie violation of the FEMA and other fraudulent activities led to money laundering.

The Supreme Court had directed the Enforcement Directorate and concerned authorities to investigate and fix liability on persons responsible for such violation and submit the progress report in the Court and let the police also submit the report of the investigation made by them so far. The Joint Director of Enforcement Directorate Rajeshwar Singh placed a report in a sealed cover before the court that allowed them to interrogate accused Directors in its custody. Special Judge A K Ojha passed the orders on the application of the ED allowing further investigations. Rajeshwar Singh, who has almost as many encounters to his credit, has become top choice to deal with high-profile cases. He exposed 4,000 crores of money laundering by none other than former chief minister of Jharkhand Madhu Koda in October 2009.

The Supreme Court also decided to monitor progress of the investigation of criminal cases registered by the police and also violations of FEMA and FDI norms. The court had directed the Enforcement Directorate to make investigation in accordance with the law and submit reports quarterly before the apex Court. The Enforcement Directorate has started investigating money-laundering aspect and taken accused Directors into its custody as per apex court orders.

It had been revealed from the report of the forensic audit submitted by Forensic Auditors that there is a serious kind of fraud played upon the buyers in active connivance with the officials of the Noida and Greater Noida Authorities and that of the banks. The money of the homebuyers stood diverted. The Directors diverted the money by the creation of dummy companies, realizing professional fees, creating bogus bills, selling flats at undervalue price, payment of excessive brokerage, etc. They have obtained investment from J.P. Morgan in violation of FEMA and FDI norms.

The forensic audit also exposed that the shares were overvalued for making payment to J.P. Morgan. It was a device for siphoning off the money of the homebuyers to foreign countries. Enforcement Directorate is interrogating CMD Anil Kumar Sharma and other Directors to track down the money trail.

It was also revealed in the report that in view of the huge money collected from the buyers and comparable investments made in the projects, there was no necessity to obtain a loan from banks. The amount so obtained did not used in the projects. The mortgage deeds in favour of the banks were not permissible due to non-payment of dues of the Noida and Greater Noida Authorities. There are several units of various projects of Amrapali have been allotted multiple times. In some cases, different banks or different branches of same bank have financed the same unit.

The Noida and Greater Noida Authorities issued conditional NOCs to create mortgages subject to payment of dues that were not paid. They issued such NOCs in collusion with builders. The state government has not initiated effective disciplinary proceedings against delinquent officers and employees of both Noida and Greater Noida authorities.

The bankers also failed to obtain clear unconditional NOCs determining that the dues were paid to Noida and Greater Noida authorities. They permitted diversion of money immediately after sanctioning of the loan and in day-to-day transactions of Amrapali group of companies. No accounts were prepared for the years 2015-2018 and money withdrawn was diverted during the said period.

The Chairman and Managing Director (CMD) of Amrapali Group of Companies Anil Kumar Sharma confessed before the apex court that Amrapali Group of Companies had web of 40 interconnected companies. These include 1. Ultra Home Pvt. Ltd. 2. Amrapali Silicon City Pvt. Ltd. 3. Amrapali Zodiac Developer Pvt. Ltd. 4. Amrapali Sapphire Developer Pvt. Ltd. 5. Amrapali Princely Estate Pvt. Ltd. 6. Amrapali Eden Park Developer Pvt. Ltd. 7. Amrapali Smart City Developer Pvt. Ltd. 8. Amrapali Smart City Pvt. Ltd. 9. Amrapali Leisure Valley Pvt. Ltd. 10. Amrapali Leisure Valley Developer Pvt. Ltd. 11. Amrapali Centurian Park Pvt. Ltd. 12. Amrapali Dream Valley Pvt. Ltd. 13. Amrapali Homes Project Pvt. Ltd. 14. Hi-Tech City Developer Pvt. Ltd. 15. Sangam Coloniger Pvt. Ltd. 16. Shalimar Coloniger Pvt. Ltd. 17. Amrapali Infrastructure Pvt. Ltd. 18. Amrapali Aerocity Pvt. Ltd. 19. Amrapali Mahi Developer Pvt. Ltd. 20. Amrapali Buddha Developer Pvt. Ltd. 21. Amrapali Hospitality Pvt. Ltd. 22. Amrapali Biotech Pvt. Ltd. 23. Amrapali Health Care Pvt. Ltd. 24. Amrapali Hospitality Pvt. Ltd. 25. Amrapali Power & Cement Pvt. Ltd. 26. Stunning Construction Co. Pvt. Ltd. 27. Kapila Build Home Pvt. Ltd. 28. Gaurisuta Infrastructure Pvt. Ltd. 29. Gaurisuta Infra Solution Pvt. Ltd. 30. MSB Software Pvt. Ltd. 31. MVG Techno Consultant Pvt. Ltd. 32. Noida Text Fab Pvt. Ltd. 33. Navodya Properties Pvt. Ltd. 34. AHS Joint Venture 35. Amrapali Homes 36. Amrapali Grand 37. HIMS Pvt. Ltd. 38. Amrapali Spring Valley Pvt. Ltd. 39. Amrapali Patel Platinum and Amrapali Media Vision Pvt. Ltd.

The Supreme Court of India displayed proactive role as a savior of homebuyers by taking initiative to lift corporate veil of Amrapali group of companies and tracing its modus-opreandi to divert flat buyers money for their personal gains. The forensic audit of nine group companies exposed huge diversions of money to the tune of 2996 crores. The affairs of remaining companies are under the lenses of forensic auditors under overall monitoring of the apex court.

The fund diversion unearthed in Amrapali Smart City Dev. Pvt. Ltd.(538.59 crores), Amrapali Centurian Park Pvt. Ltd. (518.78 crores), Amrapali Dream Valley Pvt. Ltd. (445.33 crores), Amrapali Leisure Valley Pvt. Ltd. (431.11) Amrapali Silicon City Pvt. Ltd.(391.57 crores), Amrapali Leisure Valley Dev. Pvt. Ltd. (237.53 crores), Amrapali Zodiac Dev. Pvt. Ltd. (224.47 crores), Amrapali Princely Estate Pvt. Ltd.(186.99 crores) and Amrapali Sapphire Dev. Pvt. Ltd. (21.84crores). Thus, 2996.20 stood diverted against all legal norms and sound business principles in these nine companies. The finding as to the diversion of home buyers’ funds is based on the figures worked on the basis of minute accounting as reflected in the auditors’ report. There is no proper answer to each and every entry which have been gone into by the forensic Auditors.

In order to protect the interest of homebuyers a division bench comprising Justice Arun Mishra and Justice UU Lalit of the apex court constituted a committee to aid and advise and explain forensic auditing with respect to sale of unsold inventories and which project to be taken up first which may generate funds for completing the other projects. The committee would examine all other matters which may arise, including the objections which are being raised by various persons in the matter of sale of the properties by MSTC.

The committee will consider the various problems which are arising in day-to-day functioning of the receiver. The committee is comprising of Receiver R. Venkatramani, Forensic Auditors Ravinder Bhatia and Pavan Kumar Aggarwal and Chartered Accountant Devendra K. Mishra. The apex court also asked the committee to submit a report with regard to the claims raised by Banks etc. before the state-owned MSTC Ltd.

The Amrapali group in 2011 in Noida and Greater Noida had launched various real estate projects for housing to construct approximately 42,000 flats. Various brochures were published assuring the delivery of possession shall be made in 36 months with other world-class amenities. Some of the projects include Saphire Phase-I and Phase II 2341units, Leisure Park 2993 units, River view comprising seven towers with capacity 917 residential units, Princely Estate containing 1919 units, Amrapali Silicon project include 

Zodiac (2230 units), Platinum (888 units), Titanium (54 units) and Eden Park (316 units), Centurian Park comprises of low rise 600 units, Terrace Homes 3481 units, Tropical comprising 1240 units, O-2 Valley 800 units, Golf Homes 4210 units and Kingswood Homes 1596 units. Amrapali’s Tech Park project is located in Greater Noida. Besides it had launched a project Cosmos Kochi with joint venture with M/s Vananchal projects and IIFL.

Dream Valley (Villa) with 379 units, Dream Valley-2 (High Rise) 8302 units and Enchante comprises of 1508 units, Leisure Valley Villas — which comprises of 887 units, Verona Heights and Jaura Heights — comprise of 4964 units, Adarsh Awas Yojna — comprises of 1904 units and the work shall be completed within 30 to 42 months. In a Heartbeat City-1 project, the number of units is 759 plus shops and Heartbeat City-2 project, the number of units is 1217 plus shops were under the schemes.

The Supreme Court had entertained huge numbers of writ petitions of harassed homebuyers led by Bikram Chatterjee in the year 2017 as they booked their apartments during the period 2010-2014. The buyers signed the Standard Form of Allotment-cum-Flat Buyers Agreement and even after payment of 40 to 100 percent of total consideration but despite that the builder threatened them to forfeit of huge booking amounts.