A consortium of associations consisting of around 2,500 flat buyers of Jaypee Wish Town at Noida has filed an application with the Supreme Court seeking a forensic audit of Jaypee Infratech (JIL) and Jaiprakash Associates (JAL). Homebuyers have claimed that Jaiprakash Associates has diverted over `10,000 crore from its subsidiary Jaypee Infratech, which is under an insolvency process, in construction of Yamuna Expressway and other real estate projects. The application was filed by law firm Trilegal in the SC on behalf of the homebuyers. Homebuyers had appointed ASA Financial Services (ASA) to undertake diligence of publically available accounts of Jaypee Infratech. According to the ASA report, Jaypee Infratech has spent a minimum amount of `13,283 crore towards the construction and development of the Yamuna Expressway, which translates to an amount of `80.50 crore per km. However, the report compares the expenditure with an amount of `17.16 crore per km, which translates to `34.32 crore per km after indexing for inflation as per the consumer price index, spent on constructing a comparable six-lane concrete Mumbai-Pune Expressway. The report finds that JAL might have potentially received an excess payment of approximately `46 crore per km for the construction of the Yamuna Expressway. This amount totals to approximately `7,500 crore for the 165-km length of the Yamuna Expressway.

The report also said Jaiprakash Associates likely to have overbilled at least `3,000 crore to Jaypee Infratech for construction and development of the later’s real estate projects. “It is submitted that if the transactions involving excess payments are reversed, the company will be capable of fulfilling its obligations towards the homebuyers and other stakeholders in a time-bound and efficient manner…it will also be easier to formulate a resolution plan for construction of real estate projects and revival of JIL,” it says. On September 11, the apex court had asked JAL to deposit `2,000 crore with its registry by October 27 to protect the interests of flat buyers. The builder had requested the Supreme Court that it wants to sell off Yamuna Expressway to generate money, and has an offer in hand for `2,500 crore. The Supreme Court had rejected JAL’s proposal to hive off its multi-crore Yamuna Expressway toll asset rights to generate the funds and had extended the time to deposit `2,000 crore as per its earlier order till November 5.

Coming down heavily on JAL for failing to deposit `2,000 crore to cover part of its subsidiary Jaypee Infratech’s liability towards 32,000 homebuyers, the Supreme Court last week had asked the directors of the real restate firm to be personally present before it and disclose their personal assets on November 22. The designated insolvency resolution professional had invited companies, investment firms and fund houses with a net worth of over `1,000 crore to complete the delayed projects, including Noida’s Wish Town, by infusing `2,000 crore. JSW Group, Vedanta, the Lodha Group and Deutsche Bank are among the 18 companies that have shown interest in buying Jaypee Infratech. The Allahabad bench of the NCLT classified Jaypee Infratech, a subsidiary of Jaiprakash Associates, as insolvent on August 9 on a petition filed by IDBI Bank under the Insolvency and Bankruptcy Code 2016. Jaypee had defaulted on a `526-crore loan by the bank.