Amrapali Group fund diversion case: SC allows Delhi Police to arrest CMD, two directors; orders attachment of properties

The Supreme Court has allowed Delhi Police to arrest Amrapali chairman and managing director (CMD), Anil Kumar Sharma and two other directors in a criminal complaint filed against them. It said the Economic Offence Wing (EoW) of Delhi Police can also arrest Amrapali directors—Shiv Priya and Ajay Kumar in the case.

#UPDATE | SC allows Delhi Police to arrest Amrapali CMD and other two directors of the group forthwith in a criminal complaint filed against them. https://t.co/9LvM3X6Uaj

— The Times Of India (@timesofindia) February 28, 2019

Supreme Court has also directed the forensic auditors to complete their detailed investigation on transfer and or divergence of home buyers money by Amrapali group before 22 March, and fixed the matter for further hearing to 26 March. A bench of Justices Arun Mishra and U U Lalit said: “We had never stopped any agency from arresting the directors, who are presently housed at a hotel under the detention of UP police.”

Supreme Court also directed the attachment of Amrapali Group CMD Anil Sharma's personal properties, including his bungalow in South Delhi. It also made it clear that the properties of the other two directors of Amrapali is also being attached. https://t.co/akEGuBgiHR

— ANI (@ANI) February 28, 2019

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The court is seized of a batch of petitions filed by home buyers who are seeking possession of around 42,000 flats booked in projects of the Amrapali Group. The three directors including the CMD were in the custody of UP police till now as per the direction of the apex court in the case filed by home buyers. Now Delhi Police has been allowed to arrest and interrogate them in a separate case of cheating lodged with its EoW wing. The Supreme Court on 14 February grilled Sharma for Rs 94 crore of home buyers’ money being shown in his bank account and also warned that it would send him to jail for his “reluctance” in disclosing the identity of a person, who had bought company’s shares worth Rs 140 crore from the multi-national firm JP Morgan. The top court had given Sharma one last opportunity to return Rs 6.55 crore of home buyers’ money, which he had transferred to his daughter, by 28 February and sought explanation of Rs 94 crore shown in his bank account. [caption id=“attachment_4219349” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] It also appointed a valuer to ascertain the exact value of 5,229 unsold flats including those booked by Amrapali for just Rs 1, Rs 11 and Rs 12 and asked the valuer to submit its report by the next date of hearing. A bench of Justices Arun Mishra and U U Lalit also brought ‘The Royal Golf Link City Projects Pvt Ltd’ under its scanner and sought its share holding pattern, names of promoters and balance sheet. The court was informed by the forensic auditors that land for the project were purchased by Amrapali and in all possibility it appears to be a front company of the embattled real estate firm. “We want to know, who paid the money for the land and how much money. Who are the promoters in the company and who are the shareholders. We also want to know what is the present valuation of the land. If it is honest investment we will not touch it but if it’s not then we will take it over,” the bench told advocate Nikhil Nayyar appearing for Royal Golf Link Projects Ltd. The bench also restrained Royal Golf Link from alienating its properties till further orders. It also asked the valuer to explain the transaction made by JP Morgan Real Estate fund and Amrapali Group and how it sold the real estate firm’s shares to two little-known companies ‘Neelkant’ and ‘Rudraksh’ for Rs 140 crore. The bench noted that ‘Neelkant’ and ‘Rudraksh’ company was owned by Chandan Kumar, who was a peon in the office of statutory auditor of Amrapali and Vivek Mittal was his relative. Counsel for JP Morgan said that there was one more person as director in the ‘Neelakant’ and his name was Atul Mittal but his relation with others is not known. “We will seek information from Amrapali CMD Anil Kumar Sharma about Atul Mittal and send him to jail straightaway if he do not disclose his identity and relations. This is a serious kind of fraud. How does the office boy and a small time contractor have Rs 140 crore money to purchase shares of Amrapali,” the bench said. The court asked Sharma about Atul Mittal, to which Sharma very reluctantly replied that he was one of the relative of company’s statutory auditor. It asked Sharma to explain as how does Rs 94 crore of home buyers’ money was shown in his account and told him that if it is company’s money then it should be returned by 28 February. The court said that if any facts are suppressed by the company or its promoters it will be viewed seriously and would be considered as “aggravated contempt”. On 11 February, the apex court had taken strong exception to two prime properties of Amrapali, including a five-star hotel, finding no bidders in an auction and said that prima facie it looks like “cartelisation is at work”. The top court said that it is “shocking and disturbing” that bankers are not coming forward to finance the properties. A five-star hotel ‘Amrapali Holiday Inn Tech Park’ constructed in Greater Noida and prime land in Vrindavan in Uttar Pradesh were put up for auction on 31 January by the DRT but no bidder had come forward to bid. The court had allowed the NBCC to issue advertisement for the unsold flats of two Amrapali Projects – Eden Park and Castle – being constructed by it so as funds could be raised. The court appointed forensic auditor Pawan Kumar Aggarwal told the bench that he identified 5,229 unsold flats from where around Rs 6,000 crore could be raised by selling them. The forensic auditors also pointed out that multi-national firm JP Morgan Real Estate fund, which had invested Rs 85 crore in Amrapali Zodiac in 2010 by purchasing its share and later selling them to the sister companies of the realty firm has violated several then existing norms. On 25 January, the apex court had given NBCC go-ahead to complete two stalled projects of Amrapali Group. The NBCC had told the court that it has floated tenders for completion of two projects—Eden Park and Castleof Amrapali and would start construction in the month of February. On 16 January, the court-appointed forensic auditors have said in their report that posh flats were booked on sums as low as Re 1, Rs 11 and Rs 12 per sq ft in the name of home buyers. -–With PTI inputs .