Empire Built Out Of Homebuyers’ Funds, Auditors Tell SC
The Supreme Court-appointed forensic auditors, which were asked to track diversion of homebuyers’ money by the Amrapali group, told the court on Tuesday that the company’s promoters and directors had built the empire out of the money received from buyers and they did not put in even a penny out of their pocket in the business.
Accepting the auditors’ report, a bench of Justices Arun Mishra and U U Lalit decided to proceed against Amrapali on the basis of their findings and also allowed Delhi Police to conduct further probe in the criminal case lodged against its promoters and directors for cheating thousands of homebuyers. The bench had in February sent Amrapali CMD Anil Sharma and two directors—Shiv Priya and Ajay Kumar— to Delhi Police custody for interrogation and they are still in custody.
In a voluminous report afraised if the money diverted by the group was brought back and the money raised by selling unsold flats and commercial spaces of the group.
The court said a mechanism has to be formulated to protect the interests of homebuyers and banks which had given more than Rs 1000 crore to the group besides the Noida authorities which have not been paid by the group for getting land. The court asked how could the group claim ownership of its properties if the promoters and directors had not invested any amount ter conducting forensic audit of 46 registered companies and other shell companies of the group, auditors Pawan Kumar Aggarwal and Ravi Bhatia said around Rs 3,500 crore of homebuyers’ money was diverted by the group. The report concluded that the real estate giant collapsed because of diversion of money for purposes other that construction of buildings though the amount paid by the homebuyers was sufficient to complete all its projects.
They also told the bench the amount required to build the unfinished projects could be from their pockets.
“The promoters have not invested even a penny. Can they retain ownership of the properties? Can they have any right over the properties? They have violated so many laws,” the bench observed.
The court’s apprehension that the group siphoned off homebuyers’ money was substantiated with the forensic report revealing that there are documentary evidence to show that funds were transferred to more than 100 shell companies outside the Amrapali group through dubious transactions and the money was invested in mutual funds, LIC and for expansion of businesses other than construction activities.
The auditors also told the apex court bench that the group had sold many properties during the pendency of the case in the SC in violation of the court’s order in order so that those were not attached or auctioned.
The arguments will continue on Wednesday.