STOCK MARKET BSE NSE

Amrapali case: ED to probe role of JP Morgan, other lenders

JP Morgan invested I85 crore in shares of an Amrapali Group company and later sold them to two little known firms ‘owned’ by peon of the group’s statutory auditor

Published: 25th July 2019 01:27 AM  |   Last Updated: 25th July 2019 08:22 AM   |  A+A-

Express News Service

NEW DELHI:  The Enforcement Directorate (ED), which has initiated an investigation into the Amrapali case, is likely to question all the lenders of the fraud-hit realty firm, including JP Morgan. The quizzing will be on the basis of the forensic audit report, which has alleged that the bank helped Amrapali Group in siphoning off homebuyers’ funds.

On July 23, the Supreme Court ordered a probe into the serious financial fraud by the Amrapali Group, which reportedly diverted money of 42,000 homebuyers for its own profit. The violations range from disregarding of foreign investment norms, paying dividend without generating profits, setting up fake companies and overvaluing shares.

“The agency has already looked into all the money trails of the company and is now looking into the forensic report. There are serious discrepancies in the way lenders conducted themselves. They will be questioned soon,” a senior official from the Enforcement Directorate told TMS.The Supreme Court had earlier ordered a forensic audit of the Amrapali Group, sensing financial fraud by the group’s promoters. The forensic auditors, in their report submitted to the court, also pointed out that there were discrepancies in the investments made by JP Morgan Real Estate Fund in the Amrapali Zodiac project.

The 2,000-page report submitted by court-appointed auditors Ravi Bhatia and Pawan Aggarwal alleged that JP Morgan Chase & Co unit violated India’s foreign investment rules and helped property developer Amrapali Group divert funds from realty projects.

JP Morgan invested around `85 crore ($12.3 million) in an Amrapali Group company’s shares and later sold them to two little known companies, namely Neelkant and Rudraksh, for `140 crore. The bench noted that Neelkant and Rudraksh were owned by Chandan Kumar, who was a peon in the office of Amrapali’s statutory auditor. The auditors flagged the issue, questioning how a company (JP Morgan) could do such a huge transaction without any verification.

“The shares were overvalued for making payments to JP Morgan… It was adopted as a device for siphoning off the money of homebuyers to foreign countries,” the two-judge Supreme Court bench headed by Justice Arun Mishra said in its ruling.

Stay up to date on all the latest Business news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp