Moneycontrol Be a Pro
Get App
Last Updated : | Source:

Supreme Court directs forensic auditors to examine trail of Rs 2,990 cr allegedly diverted by Amrapali

Forensic auditors have also been directed to examine the sub-leases granted by Amrapali Group by next date of hearing - January 16, 2019.

Almost a week after it ordered attachment and sale of Amrapali's properties and after the embattled company's Chairman and Managing Director admitted to having diverted Rs 2,990 crore to other companies to expand his businesses, the Supreme Court on December 12 directed forensic auditors to examine the trail of the amount paid for by homebuyers that was allegedly diverted to buy shares of sister companies.

Next date of hearing is January 16, 2019.

"More than Rs 2,990 crore were taken out from nine companies of Amrapali Group in the name of assets creation and purchase of shares of sister companies. You should examine the trail of the money as to how and where did it go, and the assets created by the fund," the bench of Justices Arun Mishra and U U Lalit directed the forensic auditors.


The court also asked the company to file the details of the assets it created with the over Rs 2,990 crore and the board resolutions which allowed Rs 1,100 crore to be spent for purchasing share capital. It also questioned about the sub-leases granted to the family members of Amrapali directors and where the amount collected from homebuyers had gone.

The Debt Recovery Tribunal has been directed to conduct a valuation of Amrapali's five-star hotel Tech Park in Greater Noida and sell it by January end.  In its interim direction last week, the apex court had ordered attachment of Amrapali's five star hotel, a fast moving consumer goods company, a corporate office and malls and ordered that DRT sell them. All luxury cars of the directors were also attached.

“DRT has been directed to value and auction the Tech park hotel and all luxury cars of the directors have been ordered to be parked at the Amrapali office. These would be inspected and subsequently sold off by the car dealers,” legal sources said.

The apex court also questioned the accountants who had prepared the accounts statements which were submitted in the court. It ordered that their laptops be seized and handed over to the forensic auditors, sources said.

Forensic auditors have also been directed to examine the sub-leases granted by Amrapali Group by next date of hearing.

At the hearing, the promoters, statutory auditors and the chief financial officer deposited a total of about Rs 3.75 crore with the court registry that was in their possession. The apex court directed them to disclose on an affidavit if more money is in their possession and deposit it voluntarily. They have been directed to deposit the remaining amount by Jan 2, 2019, sources said.

The apex court also  stayed the move by Amrapali group  to cut off electricity and water supply to residents of Amrapali societies. It also directed Noida and Greater Noida Authorities to give individual water connections to all residents and said that it would give directions to the authorities to provide power connections to all these home buyers by the next date of hearing, sources said.

NBCC filed its status report and informed the court that it had filed DPR for eight projects and was in the process of filing DPRs for the remaining projects.

The apex court had on December 5, ordered attachment and sale of the realty firm's five-star hotel, cinema hall, malls and factories across India, calling it "a worst kind of cheater" and "a perfect liar" for not complying with the court's direction.

In an affidavit submitted to the apex court last week, CMD of the company Anil Sharma had admitted to diversion of funds amounting to Rs 2996 crore to other companies for expansion purpose. This he had said had led to a financial crunch and was the main reason why housing projects were not completed, he had said in his affidavit.

As many as 15 companies have received Rs 11,573 crore from homebuyers and it raised Rs 4,040 crore from financial institutions and foreign direct investment, he had said.

Sharma had also said that his family received crores as salary and professional charges and Rs 13 crore were used to purchase 86 luxury cars. He also received a salary of Rs 44 crore in the last decade and his company paid income tax of Rs 5.5 crore on his behalf.

He had also said in his affidavit that his present assets are worth Rs 12 crore out of which Rs 29 lakh have been deposited in 17 bank accounts.

Stating that he is rendering an ‘unconditional apology for any acts of ommissions to comply with the orders,” Sharma in his affidavit had claimed that neither the group company nor the provider and their family members possess or even possessed any immoveable/moveable property outside India or abroad.

As for the reason for transferring funds, he had said that the company faced several issues related to land acquisition disputes between farmers and authorities. “The projects were near completion and were at an advance stage of construction, repayment of bank loan became utmost priority for the company at the relevant time. This was the prime reason for transferring funds from one group to another group company for maintaining cash flows in the form of inter company deposit and share capital,” the affidavit said.

As many as 15 luxury cars and 71 vehicles were purchased between 2009 to 2015. “Most of the vehicle were transferred/sold in 2017 because of non-availability of resources to pay long pending dues of employees/creditors as the depreciated value was too low and even vehicles could not be repaired or maintained by the company,” the document said.

Forensic auditors had identified five properties purchased by the money siphoned off from home buyers – these included an Amrapali hospital, two commercial towers in Greater Noida, a property in Goa by the name of Eklavya and an industrial plot in Greater Noida called Gaurisuta. DRT had been advised to conduct a valuation and sell all these properties.

The top court had asked the Chief Financial Officer Chander Wadhwa to deposit Rs 11.69 crore with its registry within three weeks. It also asked a statutory auditor Anil Mittal to pay Rs 47 lakh.

It also restrained the embattled firm from alienating its companies through which it had transactions and ordered attachment of such firms. It had also directed that it cannot create any third party rights for 86 luxury cars and SUVs purchased from the company's funds. The court also directed the firm to disclose to whom these cars have been sold, lawyers said.

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 had come across 31 companies whose names were never disclosed by the embattled real estate firm.

On October 26, the apex court had grilled the CFO and internal auditors of Amrapali Group over diversion of home buyers money and ordered that the company's CMD as also its two other directors would remain under police surveillance at a hotel in Noida.

It had also initiated contempt proceedings against the group's Chairman and Managing Director (CMD) Anil Kumar Sharma and its directors for prima facie violating court's order and thwarting the course of justice.

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.

Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Dec 12, 2018 09:53 pm
Follow us on
Available On