The auditors, who were entrusted with the task of tracking the trail of diversion of over Rs 2,765 crore of homebuyers' money by conducting forensic audit of all 46 companies of the group, told a bench of Justices Arun Mishra and U U Lalit that their preliminary investigations revealed that money was diverted to at least 20 shell companies. They dismissed the contentions of the group which maintained that money was not diverted to companies outside and the diversion was done to invest in its other housing projects.
Auditors Ravi Bhatia and Pawan Kumar Aggarwal, one of whom had unearthed the Harshad Mehta scam, gave three specific instances of siphoning off of funds which came to light during the initial probe. They said Rs 125 crore was given to a firm known as Gauri Suta Infrastructures Pvt Ltd which was worth only Rs 75,000. They said the company was managed by relatives of the statutory auditors of the Amrapali Group, which means that the auditors of the group were also involved in the bungling.
They informed the court that the Amrapali Group spent homebuyers' money partly for construction of housing projects and the rest was diverted to shell companies created by the group and its promoters. They informed the court that Rs 4 crore advance was given to another firm whose worth was less than Rs 1 crore and in another case the group paid Rs 4 crore to a company to search a property of Rs 6 crore. In a damning indictment of the group's auditors, they told the court that the fraud in the company went unnoticed as they were also involved in the dubious transactions and the company had given flats free of cost to their relatives.
They said Rs 600 crore of Rs 1,040 crore collected from homebuyers in one of the housing projects was diverted for other purposes.
The bench asked the auditors to file a status report on the probe done by them so far and also give details with respect to the role of the group's auditors and their involvement in the scam. "It means that auditors were also involved in the bungling. This is professional misconduct... These people have done a big fraud. It is a big racket and it has to be unearthed. How to catch the person and send them to jail is the question," the bench said.
Bank of Baroda, which is one of the lenders to Amrapali Group, had earlier told the court that Amrapali Infrastructure Private Limited (AIPL) was involved in dubious transactions and diverted money to companies managed by family members of the group chairman.
"It is evident from a perusal of the forensic audit report that certain linkages can be established between AIPL and other related parties used for routing of funds amounting to Rs 2,156 crore. All these transactions appear dubious and merit further investigation by an independent auditor," the bank said in its affidavit. The report also pointed out that funds were transferred to shell companies. It said AIPL had given an unsecured loan of Rs 288 crore in 2016 to one Jhamp Finance and Leasing Pvt Company, which, it says, "seems to be under indirect control of AIPL" as its registered address is the same from where other companies managed by the chairman's wife and daughter operate.
The report also gives details of a transaction of Rs 101 crore as loan to Jotindra Steel and Tubes Ltd in 2015-16, which turned out to be an NPA. It said this is also under indirect control of Amrapali as both companies have common directors.
from Times of India https://ift.tt/2ShOX5v
