Apex court directs ED to attach properties of multinational firm JP Morgan
The Supreme Court on January 13 permitted the Enforcement Directorate to take embattled firm Amrapali’s CMD Anil Sharma and director Shivpriya into custody for questioning and allowed the ED to attach Indian properties of US-based JP Morgan for transacting with the realty firm and allegedly siphoning of homebuyers' money in violation of the Foreign Exchange Management Act (FEMA) and FDI norms.
A bench of Justices Arun Mishra and U U Lalit allowed the ED to take into custody the realty firm’s CMD Anil Kumar Sharma and other director Shiv Priya, who are behind bars on the top court's order for custodial interrogation until January 20 under alleged money laundering offences.
The next hearing is on February 17.
It permitted ED to take them into custody immediately and said once interrogation is over, they can be sent back to jail. They would continue to be in custody until such time the homebuyers’ money is recovered, the court said.
ED joint director Rajeshwar Singh, who is supervising the probe against JP Morgan, informed the bench that they had completed the investigation against JP Morgan and filed a complaint for money laundering against the MNC. The proceedings will now take place under the Prevention of Money Laundering Act.
It said it has prima facie found that there was violation of FEMA norms by the US-based JP Morgan and a complaint in this regard has been lodged.
"They (JP Morgan) have lot of properties in India. We want you to attach their office or corporate properties of like amount. Then they will come running to us and we will see to it," the bench said.
However, JP Morgan in a statement said that it “is not a party to the Supreme Court proceedings, and it has received no communication or notice from the Supreme Court to date.
"Specifically, the Supreme Court has made no order directing seizure or attachment of J.P. Morgan assets - media reports do not reflect the order passed by the honorable Supreme Court. Compliance with applicable laws, regulations and policies including foreign direct investment rules is fundamental to how we do business at J.P. Morgan and we always co-operate with any government or regulatory agency," it said
As for recovery of dues, it must be remembered that last year the court had directed premier project Royal Golf Link City Projects at Greater Noida, to pay around Rs 66 crore by January 10 and had lifted the injunction on 50 per cent of the properties. The apex court had also asked Orissa State Housing Board, to deposit Rs 34 crore with the apex court registry, which had been deposited by Amrapali Group with it for developing a housing project.
On January 13, both Royal Golf Link City Projects and OSHB have both been given four weeks time to deposit the amount, advocate Mihir Kumar told Moneycontrol.
Surekha Group has deposited title deeds of properties worth Rs 167 crore with the court receiver.
Metal Scrap Trade Corporation (MSTC) informed the court that they had received bids for eight cars and two flats and one office of the embattled company located in Noida’s Sector 62. The total amount that can be recovered from their sale is Rs 7 crore. The apex court has directed the receiver to go ahead with the sale.
Banks have sent their objections to the receiver with regard to regularization of bank accounts.
The court appointed receiver in the Amrapali matter, R Venkataramani, informed the bench that registrations have commenced but there were problems with respect to the area on which stamp duty is to be calculated as the builder buyer agreement refer to different areas – some refer to it as carpet area, while others refer to it as super area.
The court has, therefore, decided to constitute a committee consisting of the receiver, the two forensic auditors and the auditor appointed by the court receiver. This committee is expected to take a final call over what is the area over which stamp duty has to be paid by buyers.
NBCC informed the court that they are in the process of awarding contracts in three projects – Zodiac, Sapphire 1 and Princely Estate
Rhiti Sports informed the apex court that it had paid former Indian cricket captain M S Dhoni, who was then the real estate firm’s brand ambassador, Rs 37 crore through cheque for various brand endorsements. They produced the documents along with their application filed in the Supreme Court.
Application to enable Amrapali Group to access money from the Rs 25,000 crore stress fund set up by the government to complete the stalled projects is yet to be filed. The Supreme Court on December 16 had directed the Centre to respond to its query on the turnaround time it will take to take a decision on the application filed by Amrapali Group to access the money from the fund that was announced by the government on November 6 for which SBICAP Ventures is the alternative asset manager.
The ASG had informed the court that Amrapali Group would have to file an application giving details of the project and that funding would be disbursed provided the project qualifies for it as per the guidelines.
Meanwhile, the Noida Authority has started registering Amrapali flats from Jan 10 and two homebuyers have received their flat registration so far. Both are from Sapphire Phase 2 project. There are still nine more projects in Noida with over 10,000 buyers who have to get their flats registered.
Last week, the court appointed receiver in the Amrapali matter, R Venkataramani had directed the Noida Authority and the stamps and registration department to start the process of verifying homebuyers. It was in July last year that the apex court had ordered that buyers of all Amrapali projects be verified and their registrations completed.
On July 23, 2019, the apex court had cracked its whip on errant builders for breaching the trust reposed by homebuyers and ordered cancellation of the registration of the Amrapali Group under the real estate law RERA, and ousted it from its prime properties in the NCR by nixing the land leases.
The top court had also termed the sequence of events in Amrapali group a "shocking and surprising state of affairs" where such large-scale cheating has taken place and middle and poor class home buyers were duped and deprived of their hard-earned money.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.