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Amrapali Group Cheating Thousands: Forensic Auditors Inform SC

Over Rs 9.5K cr can be recovered from Amrapali Group and lawyers penthouses: forensic auditors to SC

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Forensic auditors told the Supreme Court on Thursday, 2 May, that Rs 9,590 crore can be recovered from the embattled Amrapali Group which has diverted Rs 3,523 crore of home buyers money.

Of the money which was diverted, as much as Rs 455 crore can be recovered from persons including directors of the realty firm, their family members and individuals holding key managerial positions.

Court appointed forensic auditors, Pawan Agarwal and Ravi Bhatia told a bench of Justices Arun Mishra and UU Lalit that firm sold 5,856 flats at throw-away prices and Rs 321.31 crore can be recovered at the current market value.

They also said that Rs 3,487 crore is recoverable from home buyers who have booked flats and taken the possession in 14 Amrapali Projects.

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The auditors in their eight-volume report submitted to the court said that till now they have detected Rs 152.24 crore which the company's directors and their family members have taken for paying income taxes, advances for purchase of share and under other heads.

The summary report also pointed that from 35 group companies, persons holding key managerial positions including directors siphoned off Rs 69.36 crore, which was cash in hand with the firms.

“Amounts given as advances without any business transactions which have not been adjusted along with the amount received/paid for the non-genuine transactions amount to Rs 234.31 crores and should be recovered from the management of the Amrapali Group of companies,” the report said which included only the companies audited by Bhatia.

The further report of Agrawal is yet to be placed before the court. The auditors pointed out that there were 5,229 unsold flats of Amrapali in 11 different projects and can be sold for Rs 1,958.82 crore.

They said that non-genuine and bogus purchases amounted to Rs 1,446.68 crore and Amrapali Group has a liability of Rs 6,004.6 crore towards Noida and Greater Noida authorities.

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The top court has accepted the reports of forensic auditors and sought explanation from the group and its associates.

On 28 February, the apex court had allowed Delhi Police to arrest Amrapali group CMD Anil Sharma and two directors on a complaint that home buyers of their various housing projects were cheated and duped of their funds.

The top court, which is seized of several pleas of home buyers seeking possession of around 42,000 flats booked in projects of the Amrapali group, also ordered attachment of personal properties of the CMD and directors -Shiv Priya and Ajay Kumar.

The trio, under the detention of Uttar Pradesh police and kept in a hotel at Noida since 9 October last year by the apex court for not complying with its orders, was in for a shock when the court ordered the arrest on a plea by Economic Offence Wing (EOW) of Delhi Police saying that it wanted to quiz them in a separate cheating case.

The court had 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.

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In yet another startling revelation, the embattled Amrapali Group gave away flats and penthouses as fees to lawyers representing it at various judicial forums, forensic auditors informed the Supreme Court on 2 May.

Amrapali lawyers accepting fees from their clients in 'kind' is in violation of law, the court said.

The bench said it is prohibited under the Advocates Act and no lawyers can accept the fees in kind.

Hearing a batch of home buyers' petitions, a bench of Justices Arun Mishra and UU Lalit ordered all the directors of Jotindra Steel and Tubes Ltd, a supplier to the Amrapali group, to appear before the forensic auditors over the next three days.

Akhil Sureka, a Managing Director in Jotindra Steel and Tubes Ltd, a public listed company, was found to be a director in group companies of Amrapali in the forensic audit.

The court appointed forensic auditors detected siphoning of over Rs 400 crore by Surekha, who according to them, is an authorised signatory of Amrapali in banks since 2016.

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Forensic auditors Pawan Agrawal and Ravi Bhatia, without taking any names, told the bench that some lawyers appearing for Amrapali Group in the top court in contravention of the Advocates Act, have taken flats and penthouses from their client.

I request the lawyers, who have received the flats, from Amrapali to return the property as soon as possible.
Forensic auditor Pawan Agrawal told the jam packed courtroom.

Senior advocate Vikas Singh, appearing for Surekha, told the bench that he was duped by Amrapali and it owes him Rs 112 crore for the material they have supplied for construction of projects.

He said that after Amrapali Group ran into trouble, it transferred Floor Space Index (FSI) worth Rs 80 crore to him which was hived off to third party for development. FSI is the ratio of the built up space on a plot to the area of the plot.

To this, the bench said, "You might be a creditor of first of its kind who for recovering money, invested more money into the company running in trouble. For us, it seems that you have created cobweb of companies to siphon off the funds from Amrapali. The FSI cannot be transferred under RERA Act.”

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Singh said that Akhil Surekha remained director of Amrapali companies for just 15 days in June 2016 and then existed from those firms and even he was discharged from being a guarantor in the banks.

The bench, asked how did the banks discharge him from being a guarantor and sought details of all the documents by which he was relieved.

"A supplier to the company cannot be a director and authorized signatory of the same firm," the bench said and directed that all the directors to appear before the forensic auditors with all the details of transactions and documents.

The bench also asked senior advocate Gaurav Bhatia, appearing for Amrapali Group to explain how a company named 'Stunning Construction Ltd' was floated to pay the income taxes and advances amounting to Rs 234 crores to the directors and their family members and other higher officials of the Group.

The hearing in the matter remained inconclusive and would continue on 8 May.

On 1 May, the top court had said that Amrapali Group has committed a “first degree crime” by cheating thousands of home buyers and no matter how powerful the people behind this mess are, they will be booked and prosecuted.

(Published in arrangement with PTI)

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Topics:   Supreme Court   Amrapali group 

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