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Amrapali diverted homebuyers' money to Dhoni, wife's firms, says Supreme Court

Amrapali’s "arrangement" with Rhiti Sports Management Private Limited and Amrapali Mahi Developers Private Limited came to light during a forensic audit ordered by the apex court of the real estate developer in 2018.
Jul 24, 2019 / 01:09 PM IST

Amrapali Group entered into "sham agreements" with firms promoted by cricketer MS Dhoni and his wife, Sakshi, to divert homebuyers' money, the Supreme Court, which on July 23 cancelled registration of all companies of the embattled property developer, has said.

Amrapali's "arrangement" with Rhiti Sports Management Private Limited and Amrapali Mahi Developers Private Limited came to light during a forensic audit ordered by the top court of the real estate developer in 2018.

The Amrapali Group of Companies paid Rs 42.22 crore to Rhiti Sports Management Private Limited between 2009 and 2015, the court was told. Of the sum, Rs 6.52 crore was paid by Amrapali Sapphire Developers Private Limited.  While Dhoni, also known as Mahi, has a major stake in Rhiti Sport, Sakshi is a director of Amrapali Mahi. Dhoni was a brand ambassador for the group until three years ago.

The audit showed that agreements made for "payment of amounts to Rhiti Sports Management Private Limited Company are sham agreements and made just for making payments to Rhiti Sports Management Private Limited.  We feel that homebuyers money has been diverted illegally and wrongly to Rhiti Sports Management Private Limited and should be recovered from them as the said agreement in our opinion do not stand the test of law", justices Arun Mishra and UU Lalit said in a 270-page order.

Amrapali Mahi Developers Pvt Ltd received share capital in cash and all expenses were paid in cash, the audit report said.

Dhoni, husband of Sakshi Singh Dhoni (director of company), was the brand ambassador of Amrapali Group and carried out a number of transactions with respect to endorsement of the group’s projects. He entered into agreements with other group companies, the audit report submitted by Pawan Kumar Aggarwal and Ravinder Bhatia said.

"We are informed verbally that this company (Amrapali Mahi) was incorporated for development of a project in Ranchi. An MoU was also entered between the parties though we were not provided a copy of that," the court said.

A flat was booked in the name of Rhiti Sports by Amrapali Sapphire in Noida. "However, Mr Sanjay Pandey of Rhiti Sports Management Pvt Ltd denied booking of any such flat. He also confirmed that neither the company nor any individual has any flat in Amrapli Group. Mr Pandey confirmed that no due diligence was carried out before accepting the brand endorsement, though he informed that brand value and paying capacity was seen. No agreement was provided though it was agreed that it would be provided by 11th March, 2019. Expenses were reimbursed to Rhiti Entertainment Private Limited a group company, without any agreement," the order said.

The sum of Rs 6.52 crore paid to Rhiti Sports was on account of agreements executed by CMD Anil Kumar Sharma. "There is no resolution on record authorising Mr. Anil Kumar Sharma, CMD, to enter into an agreement on behalf of all Amrapali group of companies," the order said.

As per the audit report, an endorsement agreement, signed on dated November 22, 2009, required Dhoni to make himself available to the chairman of the Amrapali Group for three days along with one representative of Rhiti Sports. There was nothing on record to show compliance of the condition.

Another sponsorship agreement, dated March 20, 2015, said the Amrapali Group received the right to advertise "Logo Space" at various places for Chennai Super Kings during the 2015 edition of IPL. Dhoni has been the Chennai Super Kings captain since the launch of the cash-rich league.

"It is observed that this agreement is on plain paper and executed only between Amrapali and Rhiti Sports Management Private Limited and there are no signatories on behalf of Chennai Super Kings to this agreement. No resolution in favour of Shri Arun Pandey, signatory of Rhiti Sports Management Private Limited is attached with the said agreement," the judgment said in its July 23 order.

The court also asked the government-run National Buildings Construction Corporation  to complete all Amrapali projects, providing relief to more than 40,000 homebuyers.

Amrapali Group started operations in 2003 in Delhi and within seven years, it rose to be a big real-estate player, promising "luxury and comfort in every project". Along the way, it roped in Dhoni as the brand ambassador, who had to step down as harried homebuyers took to social media questioning his dealings with Amrapali.

Meanwhile, Rhiti Group has clarified that the observations mentioned in “forensic report (only) are bereft of proper information or relevant documents. The company has been in possession of all information and relevant documents that can establish the clean image and that the observations made in the said report are incorrect.”

“It is pertinent to mention that Rhiti has been an endorsement agency for world class talent and was retained by Amrapali Group due to its fair and transparent business dealings since 2009. The question of siphoning funds does not arise because Rhiti provided all professional services as per the agreements and the then pre-agreed endorsement fee received from Amrapali was paid to relevant endorsing stars and celebrities,” it said in a statement.

The company also said that it owed approximately Rs 40 crore against Amrapali group and had moved the apex court for the recovery of dues.

“It is pertinent to note that both the proceedings were instituted before the forensic auditors were even appointed,” it said, adding that the company had been cooperative during the forensic audit and furnished all sought information/documents that were required during the audit.

“We are currently seeking legal advice and would accordingly take further steps, if so advised."
Vandana Ramnani