New Delhi: India’s Supreme Court has allowed the federal anti-money laundering agency to seize assets of JPMorgan Chase & Co.’s India unit, if needed, for allegedly violating foreign investment rules, according to a lawyer who was part of the proceedings.
The court had in July asked the Enforcement Directorate to probe JPMorgan’s role in allegedly helping property developer Amrapali Group divert 1.4 billion rupees ($20 million) from realty projects. The court’s order on Monday comes after the agency sought permission to take further steps against JPMorgan, said Senior Advocate M.L. Lahoty, who represents home buyers in the case.
It is not clear what assets can be seized and a copy of the court’s order is awaited. JPMorgan declined to comment to an email seeking a response on the issue. The court will hear the case again on Feb. 17. Under Indian laws, the bank is allowed to seek a review of the ruling by the top court and also challenge the seizure of assets, when that is done.
Once among India’s largest real estate companies, Amrapali Group, based in Noida near New Delhi, is facing a number cases filed by home buyers seeking completion of their flats or a refund. The group is among several other Indian real estate companies such as Jaypee Infratech Ltd. and Unitech Ltd. that are facing a similar fate after apartment sales slumped in the once red-hot South Asian market.
On the agency’s request, the court has also allowed interrogation of three directors of Amrapali group companies, Lahoty said.
The top court had last year directed government-owned NBCC India Ltd. to takeover Amrapali’s projects. According to the court’s July verdict, the allegations ranging from disregarding foreign investment norms, paying dividend without generating profits, setting up fake companies and overvaluing shares, were based on a forensic audit report.
JPMorgan allegedly invested around 850 million rupees in an Amrapali Group unit’s shares and later sold them to an office boy and nephew of the company’s auditor for 1.4 billion rupees, according to the July ruling published on the top court’s website. -Bloomberg
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