SC Orders Attachment of JP Morgan Properties In Amrapali Case
Forensic audits of Amrapali Group done following the directive of the Supreme Court (SC) allegedly show that the now-defunct real estate builder signed illegal agreements with New York-based JP Morgan and New Delhi-based sports management company Rhiti, to siphon off money collected from buyers of its under-construction projects.
The forensic audit has revealed that the US-based company bought Amrapali shares worth Rs 85 crore in 2010 to earn profit in the range of 75:25 ratio. These shares were later bought back by two fraud entities for Rs 140 crore operated under the names of office boys of the Noida-based builder. The company also paid Rs 38 crore of homebuyers’ money to its former brand ambassador Mahendra Singh Dhoni’s public relations manager Rhiti after signing sham deals, the forensic auditors had informed the SC.
Following the revelation, the top court on January 13, 2020, directed the Enforcement Directorate (ED) to interrogate Amrapali top brass, who are already in police custody, and attach India-owned properties of JP Morgan.
Forensic audits indicate Amrapali floated scores of shell companies in the name of office boys, peons and drivers, which worked as fronts to divert homebuyers' money. Benami transactions were widely carried out by selling premium flats for Re 1, Rs 5 and Rs 11 per sq ft in the name of over 500 people, the audits pointed out.
Earlier, the SC had cancelled the registration of all Amrapali Group companies and lease of all its properties, after it was established that the Noida-based builder duped thousands of homebuyers and committed financial frauds running into millions. Private estimates show that 42,000 homebuyers are currently waiting for the delivery of their homes which they booked in various Amrapali projects. The Group also has a standing liability of Rs 1,000 crores to about 10 banks. Additionally, the Group owes about Rs 3,000 crores to Noida and Greater Noida authorities, the two areas where the Group has the highest number of residential projects.
The top court has entrusted state-led National Building Construction Company (NBCC) with completing all pending projects of the Group while directing the ED to probe the financial fraud committed by the developer, who was once seen as the poster-boy of affordable realty in the Noida property market. The ED had earlier filed a criminal case against the company after it received 16 complaints of financial misconduct by the company and its bosses, Anil Sharma, Shiv Priya and Ajay Kumar.
Bank of Baroda had in 2017 dragged the builder to the National Company Law Tribunal (NCLT) over non-payment, following which several homebuyers moved the SC seeking justice.