ED searches 7 locations of IREO Group and M3M Group in Delhi, Gurugram

The investigations done by the ED showed that in one of the transactions, M3M Group received about Rs 400 crore from IREO Group through several shell companies in multiple layers.

The Enforcement Directorate (ED) has carried out search operations at seven locations belonging to IREO Group and M3M Group in Delhi and Gurugram for diverting, siphoning off or misappropriating funds, the investigation agency said on June 5.

The ED said it has seized luxury cars worth Rs 60 crore, including those of Ferrari, Lamborghini and Bentley, and jewellery valued at Rs 5.75 crore during raids on real estate companies IREO and M3M in connection with a money laundering investigation.

The agency said in a statement that the searches were carried out on June 1 at seven locations in Delhi and Gurugram. The owners, controllers and promoters of the M3M Group - Basant Bansal, Roop Kumar Bansal, Pankaj Bansal and other key persons - deliberately avoided investigation during the raids, the ED alleged.

According to the ED, the search operations were carried out under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

The ED has been investigating IREO Group for diverting, siphoning off or misappropriating funds of investors or customers. The investigations were initiated based on multiple FIRs registered against IREO Group. The investigations done by the ED showed that money running to hundreds of crores was siphoned off through M3M Group also, it said.

The investigations done by the ED showed that in one of the transactions, M3M Group received about Rs 400 crore from IREO Group through several shell companies in multiple layers. The transaction was shown in the books of IREO as payments towards development rights. The land was owned by M3M Group and the market value of the land was around Rs 4 crore. M3M Group initially sold the development rights of the said land to five shell companies for a payment of Rs 10 crore, the ED said in its statement.

It was claimed that the five companies are unrelated. Investigations showed that the five shell companies were operated by M3M Group. The shell companies thereafter immediately sold the development rights of the same land to IREO Group for about Rs 400 crore. After receiving the amount of Rs 400 crore from IREO Group, the five shell companies transferred the said amounts immediately to M3M Group through multiple shell companies and layers, it said.

All the shell companies were owned and operated by M3M Group under the directions of its promoters Basant Bansal and Roop Kumar Bansal and his family members. In this way, IREO and M3M siphoned off about Rs 400 crore money belonging to investors or customers and the proceeds of crime remained with M3M Group which was used by M3M for other investments or paying off liabilities. On the other hand, IREO Group did not make any efforts to develop the land and started to write off the investments every year, the statement said.

During the course of search action under section 17 of PMLA, 2002, the owners or controllers or promoters of the M3M Group, namely Basant Bansal,  Roop Kumar Bansal, Pankaj Bansal and other key persons deliberately avoided investigations, the ED statement said.

During the search operation, 17 high-end luxury vehicles (Ferrari, Lamborghini, Land Rover, Rolls Royce, Bentley, Mercedes Maybach etc.) having acquisition value of approx. Rs. 60 crore, jewellery or bullion worth Rs 5.75 crore, cash of Rs 15 lakh and various incriminating documents,  digital evidence and books of accounts are seized, the statement said. Further investigations are in progress.

However, IREO Group, in a statement, denied that there was a search operation by the ED on its premises under PMLA.

“It is hereby clarified that there has been no search operation carried out on 01.06.2023 under the PMLA ,2002 at any location in Delhi or Gurugram belonging to IREO Group. It is also vehemently denied that there is no siphoning off or misappropriation of funds by the IREO (P) Ltd,” IREO said in the statement.

“Since there has been no search operation carried hence there is no question of seizing of any high-end luxury vehicles having acquisition value of approximately Rs 60 crore, jewellery or bullion worth Rs 5.75 crore, Rs 15 lakh cash and various 'incriminating documents', digital evidence and or books of accounts,” it said.

“In addition to the above-mentioned reply, it is hereby informed that Ireo (P) Ltd did not use any shell companies as alleged and all the transactions of alleged shell companies are in accordance with law and were valued by the government-approved valuer. It is also informed that there has been no customer money involved in the alleged transaction(s),” the company said in its response.

M3M Group declined to comment.

This story has been updated to include IREO Group's statement.