A Delhi court on Monday sent R K Arora, the chairman and promoter of real estate major Supertech Group, to judicial custody till July 24 in a money laundering case.
Special Judge Devender Kumar Jangala sent Arora to jail after he was produced before the court by the Enforcement Directorate on the expiry of his 12-day custody.
The agency told the judge that it did not require his further custody.
Arora was arrested on June 27 under the criminal sections of the Prevention of Money Laundering Act (PMLA) after three rounds of questioning.
ED’s Special Public Prosecutor N K Matta, along with advocate Mohd Faizan Khan, told the court that the money-laundering case against the Supertech group, its directors and promoters stems from a clutch of FIRs registered by police in Delhi, Haryana and Uttar Pradesh.
The ED has been probing the matter related to 26 FIRs registered by the Economic Offences Wing (EOW) of Delhi, Haryana and Uttar Pradesh police against Supertech Ltd. and its group companies for criminal conspiracy, cheating, criminal breach of trust and forgery.
They have been accused of defrauding at least 670 home buyers of Rs 164 crore.
According to the ED, the company and its directors hatched a “criminal conspiracy” to cheat people by collecting funds from prospective home buyers as advance against flats booked in their real estate projects.
The company did not adhere to the agreed obligation of providing possession of the flats on time and “defrauded” the general public, the agency said.
The ED claimed its probe revealed the funds were collected by Supertech Limited and other group companies from home buyers.
The company also took project-specific term loans from banks and financial institutions for the purpose of construction of housing projects, the ED said.
However, these funds were “misappropriated and diverted” for buying land in the name of other group companies which were pledged as collateral to borrow funds from banks and financial institutions, it added.
The Supertech group also defaulted on payments to the banks and financial institutions, and currently around Rs 1,500 crore of such loans have become non-performing assets (NPA), the agency said.
Supertech Ltd, which was formed in 1988, has so far delivered around 80,000 apartments, mainly in the Delhi-NCR region. The company is currently developing around 25 projects across the National Capital Region (NCR). It is yet to give possession to more than 20,000 customers.
The company has been plagued by crisis since last year when in August its nearly 100-metre-tall twin towers – Apex and Ceyane – located on Noida Expressway were demolished following an order of the Supreme Court which found they were constructed within the Emerald Court premises in violation of norms.
More than 3,700 kgs of explosives were used to demolish the two towers.
Arora had then said the company incurred a loss of about Rs 500 crore, including construction and interest costs, because of the demolition.
The company suffered another blow in March last year when the Delhi bench of the National Company Law Tribunal (NCLT) ordered the initiation of insolvency proceedings against Supertech Ltd on a petition filed by the Union Bank of India for non-payment of dues of around Rs 432 crore.
Supertech challenged the order before the NCLAT.
In June last year, the National Company Law Appellate Tribunal (NCLAT) ordered the commencement of insolvency proceedings in only one of the housing projects of Supertech Ltd and not the entire company.
The NCLAT had also directed the constitution of a Committee of Creditors for the Eco Village 2 project located in Greater Noida (West).
The company recently got permission from the Supreme Court to arrange around Rs 1,600 crore from institutional investors to complete 18 ongoing housing projects across Delhi-NCR under the main firm Supertech Ltd, Arora had said earlier this month.
Apart from these 18, some other housing projects are being executed by different companies in the Supertech Group.