NEW DELHI: The Enforcement Directorate (ED) has registered 22 separate complaints against builders in the National Capital Region and bank officials to probe money laundering charges following in connection with cases of possible collusion being examined by the Central Bureau of Investigation (CBI), people familiar with the matter said.
CBI registered 22 criminal cases against the builders and bank officials on July 28 on the Supreme Court’s order that the agency should investigate a possible “unholy” nexus between them to sanction massive amounts under so-called subvention schemes without following any due diligence.
Officials said the financial crimes probe agency has registered 22 separate Enforcement Case Information Reports (ECIRs) - the equivalent of FIRs in ED - under the Prevention of Money Laundering Act or PMLA.
“As part of the money laundering probe, we will locate the money diverted by the builders and help homebuyers recover their invested money,” said one official, who didn’t want to be named.
He said the total amount could be to the tune of “thousands of crores”.
{{/usCountry}}He said the total amount could be to the tune of “thousands of crores”.
{{/usCountry}}ED is already investigating about 162 cases pertaining to real-estate frauds across the country.
The FIRs registered by CBI and ED name over a dozen developers, including Supertech Limited, Logix City Developers Pvt. Ltd, Jaypee Infratech Ltd, Jaypee Sports International Limited.
In April this year, the Supreme Court ordered a CBI probe after a group of over 170 petitions filed by more than 1,200 homebuyers alleged that banks had disbursed huge loans to builders under a scheme even before the projects were started. After builders/developers defaulted, the banks demanded equated monthly instalments (EMIs) to recover the loan amounts from the homebuyers.
Subvention schemes involve a tripartite agreement between the buyer, the bank, and the developer. Under these, buyers typically pay between 5% and 20% up-front, while the bank loans the rest to the developer in instalments. The developer pays the interest on a loan for a certain fixed period, usually two to four years, until the buyer takes possession. The buyer then starts paying back the loan in EMIs.
“In most of the projects, launched in 2013-15, most builders/developers started defaulting on payment of EMIs in 2018-19. Subsequently, the builders stopped paying promised pre-EMIs from 2018-19, and banks turned on buyers while projects remain incomplete,” said a second ED official.
The builders and their projects named in the CBI FIRs include Supertech Limited, AVJ Developers (India) Pvt Ltd, Earthcon Universal Infratech Pvt. Ltd, Rudra Buildwell Projects Pvt. Ltd, Geotech Promoters Pvt. Ltd, Shubhkamna Buildtech Pvt. Ltd, Bulland Buildtech Pvt. Ltd, Decent Buildwell Pvt. Ltd, Rudra Buildwell Construction Pvt. Ltd, Saha Infratech Pvt. Ltd, Dream Procon Pvt. Ltd, Logix City Developers Pvt. Ltd, Shubhkamna Buildtech Pvt. Ltd, Jaypee Infratech Ltd, Sequel Buildcon Pvt. Ltd, Ajnara India Ltd, Vatika Limited, CHD Developers Limited, Ninex Developers Limited, Jaypee Sports International Limited, Idea Builders Private Limited and Manju J Homes India Limited, the agency said.
The second officer stated that directors or promoters of several real estate firms have also been named in the FIRs.
Among banking and other financial institutions, unidentified officials of the State Bank of India, Indiabulls Housing Finance Ltd, Piramal Finance, HDFC Bank, ICICI Bank, Tata Capital Housing Finance and PNB Housing Finance Ltd, among others, were named in different FIRs.
To be sure, a status report submitted by CBI earlier this year said the majority of the 1,200 homebuyers/borrowers represented before the SC pertain to Supertech, which is facing insolvency proceedings.