ICICI Prudential AMC, Amrapali 'connived' to divert funds

 Delivering its landmark judgement on the Amrapali case earlier this week, the Supreme Court has made scathing remarks against a number of players involved, including noted global and domestic corporate entities. Among the major names that figure is of ICICI Prudential Asset Management Company, which connived with the Amrapali Group in the diversion of funds, the apex court order said.

Citing the forensic audit report of the realty firm, the Supreme Court order said that the ICICI Prudential Asset Management Company had given a sum of around Rs 74 crore on account of debentures issued by Amrapali Sapphire Developers Private Ltd during the financial year 2011-12. The debentures carried an annual interest rate of 17 per cent.

The forensic audit found that there was a "gross non-compliance" of the investors cum-shareholders agreement dated December 16, 2010, through non-appointment of directors, non-operation of bank account by joint signatory of investor, non-utilisation of funds as per the investment-cum-shareholders agreement and sale of flats at less than Rs 3,420 per square feet of saleable area. 

Many other clauses of this agreement were neither followed nor their application ensured by the investor, the order said.

Describing the debenture subscription agreement and investment-cum-shareholders agreement as "merely sham documents" which were never complied with, the apex court order said: "Amrapali group of companies and ICICI Prudential Asset Management Company Ltd were in connivance with each other in diversion of funds for non-specified purposes."

Among other well-known firms and personalities found to have allegedly benefited from the actions of the Amrapali management, or to have been involved in diverting funds of hard-earned home buyers, are global investment major J.P Morgan, Rhiti Sports Management run by cricketer Mahendra Singh Dhoni and his wife Sakshi Dhoni and the International Cricket Commiitee (ICC) Chairman Shashank Manohar. 

The Supreme Court on Tuesday granted a big relief to 42,000 beleaguered home buyers of the Amrapali Group who are waiting for possession of their flats by ruling that the pending projects be completed in a time-bound manner. 

The bench headed by Justice Arun Mishra cancelled the registration of Amrapali Group under RERA (Real Estate Regulatory Authority) along with various lease deeds granted in its favour by the Noida and the Greater Noida authorities for various projects.

The court also directed the state-run NBCC to complete all the pending projects and hand over possession to the home buyers and not recover any additional amount from them. 

The order was not limited only to the Amrapali Group's home buyers and specifically mentioned that projects of other real estate companies should also be completed in a time-bound manner, and that home buyers should not be made to run from pillar to post, which amounts to the harassment of people who have invested their hard-earned money.  IANS