Amrapali case: SC allows ED to attach assets of JP Morgan

By: |
May 23, 2020 3:30 AM

The Supreme Court on Friday allowed the Enforcement Directorate (ED) to attach properties of Mauritius-based JP Morgan and its directors for violation of money-laundering laws in connection with the Amrapali case.

JP Morgan, which was engaged in a transaction with the now-defunct Amrapali Group, had allegedly siphoned off homebuyers’ money in violation of the Foreign Exchange Management Act and FDI norms.

The Supreme Court on Friday allowed the Enforcement Directorate (ED) to attach properties of Mauritius-based JP Morgan and its directors for violation of money-laundering laws in connection with the Amrapali case.

JP Morgan, which was engaged in a transaction with the now-defunct Amrapali Group, had allegedly siphoned off homebuyers’ money in violation of the Foreign Exchange Management Act and FDI norms.

A bench led by Justice Arun Mishra passed the order after additional solicitor-general Sanjay Jain, appearing for the ED, informed the bench that the investigation into the affairs of JP Morgan detected Rs 187 crore as proceeds of crime. “This amount of Rs 187 crore does not include any home buyers’ money. All the money is in the JP Morgan’s bank accounts. We need permission to attach the JP Morgan properties,” he said.

SC-appointed receiver and senior advocate R Venkatramani informed the judges that meetings with the banks for disbursal of money for completion of the stalled Amrapali projects have taken place, but the apex court should direct the RBI to issue an advisory asking all banks and financial institutions to disburse balance loan amounts to Amrapali homebuyers to ensure availability of funds.

However, additional solicitor-general Vikramjit Banerjee, appearing for the government, informed the court that the government is having a meeting with the finance ministry on relaxing guidelines for loan disbursement and he will soon get back to the court with proper instructions on the issue. “Public money will have to be disbursed. If we make an exception for Amrapali, then this exception has to be arrived at reasonably,” he said.

Justice Mishra told the ASG that “the government has to take care of the funding. There are no private players in this. These projects are stuck due to money issues. Look at the unsold inventories.”

The top court has been monitoring the execution and handover of the stalled Amrapali housing projects ever since an internal audit report found grave irregularities on part of Amrapali firms and its directors.

The receiver’s note to the apex court pegged funds from sale of 5,228 unsold inventories at approximately Rs 2,220.45 crore, funds from sale of other Amrapali properties, attached or otherwise, at Rs 500 crore, bank loans to homebuyers and balance accruing on sold units at approximately Rs 3,870.4 crore, and receivables from unsold units at Rs 213.46 crore.

Earlier in January, the apex court had allowed the ED to take into custody the defunct group’s CMD, Anil Kumar Sharma, and two other directors, Shiv Priya and Ajay Kumar, who are behind bars, for interrogation as regards alleged money-laundering offences.

According to the share subscription agreement between JP Morgan and Amrapali Group, the US-based firm had invested Rs 85 crore on October 20, 2010 to have a preferential claim on profits in the ratio of 75% to JP Morgan and 25% to the promoters of Amrapali Homes.

Later, the same number of shares of Amrapali Zodiac was bought back from JP Morgan for Rs 140 crore by two companies — M/s Neelkanth and M/s Rudraksha — shell companies owned by a peon and an office boy of Amrapali’s statutory auditor Anil Mittal. It was apparent that M/s Rudraksha was created for money laundering as its two directors and shareholders had no income, the apex court had said earlier.

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