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Forensic auditors to examine trail of diverted funds

Forensic auditors to examine trail of diverted funds
December 19
15:12 2018

NEW DELHI: The Supreme Court has asked forensic auditors to examine the trail of around Rs 3,000 crore, the home-buyers’ money allegedly spent by the Amrapali Group on buying shares of its sister companies and asset creation.

Amrapali Group CMD Anil Sharma, directors Shiv Priya and Ajay Kumar returned to the court a total amount of Rs 1.55 crore of home buyers money “lying” with them.

The top court grilled several accountants of the group as to how they have prepared the accounts statements which were submitted in the court and on what basis they created the accounts this year for financial years 2015-16, 2016-2017 and 2017-2018.

It directed the forensic auditors to ascertain the numbers of flats which were ‘benami’ property, doubly booked or booked on a nominal value by Amrapali Group.

A bench of Justices Arun Mishra and U U Lalit directed Debt Recovery Tribunal, Delhi to conduct the valuation of Amrapali’s five-star hotel Tech Park in Greater Noida and sell it by January end.

It also questioned Sharma about the sub-leases granted to the family members of Amrapali directors and where the Rs 3,000 crore of home-buyers’ money has gone.

The bench after failing to get a satisfactory reply asked the two forensic auditors Pawan Kumar Aggarwal and Ravi Bhatia to examine the trail of around Rs 3000 crore.

“More than Rs 2,990 crores 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 told the forensic auditors.

The court asked the company to file the details of the assets it created with Rs 2,990 crore and the board resolutions which allowed Rs 1,100 crore to be spent for purchasing share capital.

It directed the forensic auditors to also examine whether any siphoning of funds was done by granting sub-leases or any favours were doled out in such transactions.

The top court noted that pursuant to its last order in which one last window was given to the directors and other officials of the company to return home buyers money, Sharma and two directors Shiv Priya and Ajay Kumar returned Rs 1.25 crore, Rs 20 lakh and Rs 10 lakh respectively.

The court sought an affidavit from Sharma and the two directors to declare that they do not have any more money of home buyers lying with them.

The bench directed Amrapali CFO Chandra Wadhwa and statutory auditor Anil Mittal to deposit Rs 9.69 crores and Rs 27 lakh of home buyers money lying with them by January 2.

It allowed the 86 luxury cars and SUVs, which were earlier attached by the court to be brought to the corporate offices of Amrapali Group where the car dealers can hold a physical inspection and later sell them.

When Sharma was questioned by the bench about the sub-leases the company granted, he replied that firm has received over Rs 66 crore by granting sub-leases and denied any wrong doing.

“The Forensic auditors should examine the sub-leases granted by Amrapali Group by next date of hearing,” the bench said, adding that the real estate firm should comply with all the requests made by the forensic auditors in 24-hours.

The court posted the matter for further hearing on January 16.

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.

 

The top court had also ordered attachment of four swanky corporate offices of Amrapali Group situated in Noida and Greater Noida, and asked the Debt Recovery Tribunal (DRT), Delhi to auction them.

The top court gave a window to the firm’s directors and their family members to return home-buyers’ money, if they have it, by December 10.

It had sought response from Amrapali Group CMD Anil Sharma and its directors, Chief Financial officer and statutory auditor Anil Mittal, asking them why a criminal case for breach of trust should not be lodged against them.

In a comprehensive affidavit placed before the apex court Anil Sharma has admitted diversion of Rs 2,996 crore to other group companies but claimed that money had not gone outside the company as it was used for purchase of share and assets creation.

On November 13, in a massive crackdown on Amrapali Group for “wilful disobedience” of its orders, the apex court had attached the company’s 100-bed multi-speciality hospital, bank accounts, the building which houses its office, certain firms and a “benami” Villa in Goa.

The apex court had earlier initiated contempt proceedings against 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. PTI

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