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JP Morgan invested in Amrapali in violation of forex norms: SC

twitter-logo PTI        Last Updated: July 23, 2019  | 21:22 IST

New Delhi, Jul 23 (PTI) Crisis-hit Amrapali obtained Rs 85 crore investment from multi-national company JP Morgan in violation of Foreign Exchange Management Act (FEMA) and FDI norms to siphon off home buyers money to foreign countries, the Supreme Court said Tuesday. The top court ordered probe by Enforcement Directorate for money laundering and to investigate the prima facie charge of FEMA violation. A bench of Justices Arun Mishra and U U Lalit said that it is apparent from the report of the forensic auditors that there was a serious kind of fraud played upon the buyers in active connivance with the officials of the Noida and Greater Noida Authorities and that of the banks. "The money of the home buyers has been diverted. The Directors diverted the money by the creation of dummy companies, realizing professional fees, creating bogus bills, selling flats at undervalue price, payment of excessive brokerage, etc. They have obtained investment from J.P. Morgan in violation of FEMA and FDI norms," the bench said. It said equity shares of the group were purchased at an exorbitant price to suit the requirements of JP Morgan, and Amrapali Zodiac Developers Pvt Ltd has diverted home buyers fund. "The shares were overvalued for making payment to JP Morgan. It was adopted as a device for siphoning off the money of the home buyers to foreign countries," the bench said as it accepted the reports of forensic auditors. The bench also noted that shares of Amrapali Zodiac from JP Morgan were were ultimately purchased for Rs 140 crores by M/s Neelkanth and M/s Rudraksha, owned by a peon and an office boy of a Amrapali's statutory auditor Anil Mittal. "The transactions of Amrapali Zodiac Developers Pvt Ltd with JP Morgan were clearly in order to avoid the provisions of the Companies Act," it said. The top court said that it is apparent that M/s Rudraksha was created for money laundering as the two directors and shareholders had no income. As per the Share Subscription Agreement, JP Morgan had invested Rs 85 crore on October 20, 2010 to have a preferential claim on profits in the ratio of 75 per cent to JP Morgan and 25 per cent to promoters Amrapali Homes Project Private Limited and Ultra Home. PTI MNL ABA RKS SA

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