The Supreme Court attached real estate firm Amrapali Group’s 100-bed multi-speciality hospital, bank accounts, the building which houses its office, certain firms and a ‘benami’ villa in Goa.
The top court asked the chief financial officer (CFO) Chander Wadhwa to deposit Rs. 11.69 crore with its registry within three weeks, said media reports. It also asked a statutory auditor Anil Mittal to pay Rs. 47 lakh.
The court sought the presence of CMD Anil Sharma and two directors Shiv Priya and Ajay Kumar on November 19.
A bench of Justices Arun Mishra and UU Lalit said that Amrapali Group has deliberately not complied with its earlier order and committed a “serious fraud” by diverting home-buyers’ money from one company to other.
Promoters of the group have been in police custody since October 9 in connection with the missing funds that they took from nearly 40,000 homebuyers whose flats are yet to be constructed.
“This is a serious kind of fraud,” judge Arun Misra said on Tuesday, after court-appointed auditors said the company continued to be uncooperative in efforts to trace the money given by investors.
The bench ordered that attachment of the group’s state-of-the-art, multi-speciality, 100-bed hospital situated at Greater Noida for which funds from Ultra Home Construction Pvt Ltd were utilised.
The bench also attached the bank accounts of Gauri Suta Infrastructures Pvt Ltd, its director Sunil Kumar and its assets after forensic auditors disclosed that Amrapali transferred home-buyers’ money from one firm to sister companies using it as conduit.
The top court also directed attachment of towers which housed the company’s office and ‘Aqua Fortis’ villa in Goa for no one came forward to claim ownership.
The court restrained the realty firm from alienating its companies through which it had transactions and ordered attachment of such firms. It also restrained Amrapali Group from creating any third party rights for 86 luxury cars and SUVs purchased from the company’s funds.
Forensic auditors Pawan Kumar Aggarwal and Ravi Bhatia, appointed by the court to look into the affairs of embattled firm, said that home-buyers’ money was given as advances to the tune of Rs. 442 crore to 15 companies and nine individuals from Amrapali Saphire project.
The report of forensic auditors said that Amrapali Infrastructure Pvt Ltd was the main company and around Rs. 2,000 crore were transferred from it to other sister companies.
Bhatia told the bench that a firm called ‘Stunning Construction Pvt Ltd’ did some “stunning work” as it paid income tax returns of the companies as well as directors and other individuals, for which it received Rs. 500 crore.
The bench then asked the forensic auditors to ascertain the investment of Amrapali in its projects and the “ghost” home buyers as the properties could have been sold to such benami persons to augment the value of company.
“They have created web of companies since 2010 to transfer funds from one project to another to circumvent the restrictions enforced in the Company’s Act,” the auditors told the bench, adding that promoters have also tried to avoid stamp duty by transferring the high value property to other company.
Aggarwal said that in the forensic audit they have found transactions of the Group with other 27 “dummy companies” and since last year the promoters of Amrapali have started withdrawing money from bank accounts of such companies.
Justice UU Lalit told the lawyers for Amrapali that the funds the company has spent to acquire property or create new companies will need to be refunded. “It should come back since the money belongs to the buyer. Therefore, all this (properties) have to be sold,” he said.
The court also pulled up the Group for filling 3000-4000 page affidavit with no requisite information and warned that directors may be sent behind bars for not disclosing the details sought by the court.
“We are giving one last opportunity to explain everything to the concerned directors and the Amrapali Group and comply with the orders of the court. It should also be explained as why contempt action should not be initiated against them,” the bench said.
The bench posted the matter for further hearing on November 20.
On October 31, the apex court had directed the Amrapali Group to disclose the names of all the companies with which it had any kind of transactions after forensic auditors pointed out that there may be a web of more than 200-250 such firms where home-buyers’ money was transferred.
The two forensic auditors, appointed by the court to look into the affairs of Amrapali Group had said besides 47 sister companies, they stumbled upon 31 companies whose names were never disclosed by the embattled real estate firm.
The court was also told that there may be a case of the Foreign Exchange Management Act (FEMA), as large amount of money was transferred to a multinational company based in Mauritius.
It questioned Wadhwa as to how a group company paid his income tax amounting to Rs. 2 crore, when he was earning only Rs. 50,000 per month.
It had also initiated contempt proceedings against Sharma and its directors for prima facie violating court’s order and thwarting the course of justice. The matter is listed on November 20.
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.