Supreme Court puts four Amrapali properties on the block

The Supreme Court on Tuesday ordered four properties linked to Amrapali Group to be put under the hammer and directed the sale proceeds to be deposited with the Court Registry.

The order came on a report prepared by the court-appointed forensic auditors, who found out a total of six companies formed by Amrapali Group only to acquire properties using the money invested by homebuyers. No substantial capital investment was made in these companies, said a report prepared by the auditors Ravi Bhatia and Pawan Kumar Agarwal.

The court zeroed in on four properties based on this input. These included a 75-bedded Amrapali Hospital at Omega 1, Greater Noida; Villa no 55, Aqua Fortis, Goa held in the name of Eklavya Building Solutions Private Limited registered at Delhi's Surajmal Vihar; three towers housing corporate office of Amrapali in Sector 62, Noida; and the registered office of Gaurisuta Buildhome Private Limited situated at E-17, Greater Noida.

The bench of Justices Arun Mishra and UU Lalit directed immediate sealing of these premises and asked Debt Recovery Tribunal to initiate auction of these properties. The bench directed the auction proceeds to be deposited with the SC Registry. In addition, the court even directed the former chief financial officer (CFO) Chander Prakash Wadhwa and statutory auditor Anil Mittal to deposit with the Court Registry cash worth Rs 12 crore they received from companies linked to Amrapali.

All this emerged in the report of the forensic auditors. But what annoyed the court was the lack of cooperation by the Amrapali Group. Although the company filed a 4,000-page document in response to court's earlier order to make a full and fair disclosure of list of companies created by Amrapali group and its transactions, the court found the relevant information missing.

The court directed the auditors to go deeper to the root of whether the money claimed to have been spent on project construction was actually spent and whether ghost companies or flat purchasers were created to park money illegally. The auditors' report stated that one Amrapali Saphire Ltd with a capital of Rs 11.39 lakh took share premium worth Rs 28.20 crore and paid interest-free advances to third party entities worth Rs 442 crore. Another company was created by the name Stunning Constructions Private Ltd, which paid out the tax liability incurred by all group firms and even tax returns of individuals including CFO was paid out of this account.

Eklavya Building Solutions, in whose name the Goa villa property existed was purchased in 2013 while Gaurisuta Buildhome which claimed to supply PVC doors to Amrapali Group had a former income-tax department employee as its Director since 2013. This company, according to the two auditors, conducted no Board Meetings nor did it have minutes of previous meetings. Its director Sunil Kumar was present in court and explained that the company was started by securing a loan against mortgage of his personal house. He claimed to have received Rs 104 crore from Amrapali but the accounts showed that he paid an advance of Rs 3.29 crore to Amrapali Group as well.

Auditors claimed the group even cheated revenue authorities by transferring assets of high value of more than 10 crore without paying stamp duty. The Amrapali Hospital, 99% shareholding of which vests in Ultra Home Constructions, the parent holding company of Amrapali, has declared the asset value (land and building) as Rs 4.96 crore whereas the market value is over Rs 30 crore. The auditors will present a fresh report by November 20 by when even the Amrapali Group has to disclose all firms created or linked to it.

Under Lens

The Supreme Court order came on a report prepared by the court-appointed forensic auditors, who found out a total of six companies formed by Amrapali Group which was created only to acquire properties using the money invested by homebuyers