Delhi court sends Supertech chairman RK Arora to ED custody till July 10

On June 27, the ED had arrested Arora on money-laundering charges. He was taken into custody under the criminal sections of the Prevention of Money Laundering Act (PMLA), 2002, following a third round of questioning at the agency's office, the ED said in a statement on June 28.

The ED arrested the promoter and chairman of Supertech Limited on June 27 under PMLA provisions. The arrest was made in connection with the investigation being done on Supertech Group for diverting, siphoning off and misappropriating funds of investors/customers, the ED said in a statement on June 28.

The ED initiated an investigation on the basis of numerous FIRs registered against Supertech Group by its prospective homebuyers. The investigation done by ED showed that huge amounts of money running into hundreds of crores were siphoned off through Supertech Group and they failed to adhere to its agreed obligations to provide the possession of flats to customers on time, it said.

The investigation done by ED showed that in one of the transactions, Supertech Group siphoned Rs 440 crore received from customers/homebuyers for purchasing land in Gurugram in 2013-14 at highly inflated prices while their already promised projects in Noida were not completed. A new project was launched on this newly acquired land and further advance was collected from hundreds of homebuyers and loans were taken from banks/non-banking financial companies, which also became non-performing assets and were declared fraud by the lenders.

Similarly, Rs 154 crore was allegedly misappropriated by Supertech for acquiring land in the name of another shell company in the same time period. Also, Rs 40 crore was allegedly siphoned off to another shell company and land was purchased in its name in Delhi, the statement said.

Funds were thus diverted to shell companies instead of being used for ongoing projects that are still not complete. During this period, Arora was the main controlling and decision-making authority for Supertech Group and decided to divert the investors’ money to various shell companies, the statement said.

Arora’s custodial interrogation had become necessary for investigation as he was avoiding questions and had been giving misleading replies. Therefore, Arora was placed under arrest on June 27 and produced before the designated special PMLA court on June 28. The court has granted the custody of Ram Kishor Arora to ED until July 10, the statement said.

Further investigation is in progress, it added.

The Supertech promoter was also summoned by the Noida administration recently for having failed to honour the recovery certificates issued by UPRERA.

In August last year, two buildings constructed by the company were demolished through a controlled implosion following orders of the Supreme Court.

In May this year, the company’s insolvency resolution plan was cleared by the Supreme Court.

The Delhi Bench of the National Company Law Tribunal (NCLT) had ordered in March the initiation of insolvency proceedings against Supertech Ltd on a petition filed by Union Bank of India for non-payment of dues of around Rs 432 crore.

Aditya Porolia, an advocate, who represented Supertech homebuyers, told Moneycontrol that several of the company’s projects are stuck and with this action, homebuyers hope that the authorities will look into why projects are stuck despite the buyers making full payment.