Three directors of Amrapali — promoter Anil Sharma, Shiv Priya and Ajay Kumar — will remain in custody till documents are handed over for an audit.
New Delhi: The Supreme Court Tuesday ordered the arrest of three directors of embattled real estate giant Amrapali Group when they failed to hand over documents for a court-directed forensic audit of its accounts.
The bench of Justices Arun Kumar Mishra and Uday Umesh Lalit sought an explanation from the advocate representing Amrapali for non-compliance with its order and warned the developer against playing “hide and seek”.
Police officials took custody of Amrapali promoter Anil Sharma and two other directors — Shiv Priya and Ajay Kumar — as per the bench’s orders. The three directors will remain in custody until audit reports are submitted, the court said.
Also read: The rise & fall of Amrapali, from real estate giant to company struggling to pay its dues
The court was hearing a plea of over 100 homebuyers who sought a stay against the admission of a plea for Amrapali’s insolvency filed by the Bank of Baroda with the Allahabad bench of the National Company Law Tribunal (NCLT) in September 2017.
What court had told Amrapali
On 12 September, the apex court directed Amrapali to hand over all the documents to the auditors so they could conduct a forensic audit and find where the homebuyers’ money was diverted. It also allowed Amrapali to hold talks with banks, the Housing and Urban Development Corporation (HUDCO) and other financial institutions to raise the required money.
In August, the top court had come down heavily on the real estate giant for alleged diversion of funds. The bench also ordered the attachment of all bank accounts and movable properties of all 40 firms of Amrapali. The bank accounts of the directors were also frozen and their personal properties attached.
DRT officer to auction properties
During the 12 September hearing, the Supreme Court had also appointed an officer from the Debts Recovery Tribunal (DRT) to auction unencumbered properties belonging to Amrapali, to raise money that would go towards the completion of its projects.
Unencumbered properties mean those that are not subject to any claims from creditors.
The court noted that unsold inventory from three Amrapali properties could fetch Rs 1,590 crore, and said: “Dharmendra Singh Rathore, officer of the DRT is entrusted with the sale of properties mentioned in the list of commercial properties.”
Instructions to NBCC
The money raised from the sale of Amrapali’s properties is to be deposited in an escrow account, which will be made available to the Centre’s construction arm, the National Buildings Construction Corporation (NBCC), which was handed over the reins to the unfinished projects in August.
On 5 September, the NBCC submitted that it required at least Rs 8,500 crore — as opposed to Amrapali’s estimated Rs 5,220 crore — to complete the construction of 46,575 flats in 15 projects left incomplete by the real estate giant.
Also read: SC appoints officer to sell off Amrapali’s properties and recover money
However, in an affidavit submitted to the Supreme Court, the NBCC said it was willing to take on this project only on a consultancy basis for which it would be paid a fee, adding that it won’t invest its own money.
“The NBCC is appointed to develop the projects and preparation of Detail Projects Report. It can also find out the consortium of banks ready to finance the projects,” the bench of justices Mishra and Lalit had said.
“Once we put the projects in your basket, you can’t shrug off the responsibility of completing them. We will bind you with it,” the bench had cautioned the NBCC.