Driver was made M3M’s director to carry out financial fraud, says ED

The Enforcement Directorate (ED) has found that a car driver was appointed as a director of a group company to facilitate transfer of development rights

The Enforcement Directorate (ED), which is investigating real estate developers IREO and M3M for allegedly siphoning funds of investors and homebuyers, has found that a car driver was appointed as a director of a group company to facilitate transfer of development rights of 78 acres in Rajasthan’s Bhiwadi to five shell companies of M3M, the agency has said.

Enforcement Directorate (ED), which is investigating real estate developers IREO and M3M for allegedly siphoning funds of investors and homebuyers found that a car driver was also involved. (HT Archives)

Each of the five shell companies were given 20% share in the land. Roop Kumar Bansal and his brother, Basant Bansal, who have been arrested, were directors in Misty Meadows Private Ltd from June 6, 1997, to December 6, 2010, and June 6, 1997 to August 9, 2010, respectively, the directorate said in a supplementary prosecution complaint akin to a charge sheet filed in August before a special court in Panchkula hearing Prevention of Money Laundering Act (PMLA) cases.

The complaint accessed by HT said that Roop Kumar Bansal’s family driver, Puran Bahadur, became a director in Misty Meadows on August 9, 2010. However, he remained a director only for about four months before vacating the position on December 15, 2010. Roop Kumar Bansal also left his directorship on December 6, 2010.

“All the said agreements were signed by Bahadur on behalf of the owner company and by Abhisek Basu for developer companies,” said the agency that probes financial crimes. “All the agreements were executed during four months when Puran Bahadur and Roop Bansal were directors in Misty Meadows Pvt Ltd.”

The process of transfer of development rights from Misty Meadows to five developer companies was completed between September and November 2010, when Bahadur was the company’s director, the complaint said.

Material evidence collected during investigation and subsequent findings revealed that Basant and Roop Kumar Bansal, who founded M3M India in Gurgaon in 2010, were directors of the company when the diversion of funds took place from IREO to M3M, the supplementary charge sheet said.

Roop Kumar Bansal in his June 19 statement admitted that Bahadur was his family driver, the ED said. The sequence of events suggested that Bahadur was made director and authorized signatory of Misty Meadows just to sign the agreements required for execution of transfer of development rights to five shell companies as a part of premeditated planning and Roop Bansal, despite being a director in Misty Meadows, did not do it, the ED said.

The five shell companies – Base Realtors, Adi Buildwell, Cygnus Propbuild, Innovative Realtech and Vision Multiplex further – assigned the 78 acres through development agreements to 10 IREO group companies, namely Adson Software, Buzz Hotels, Sang Promoters, Regal Green Lands, BTVS Buildwell, Bulls Realtors, High Star Builders, Panoply Propbuild, Auspicious Infrastructure and Hardcore Realtors, for development, the federal agency said.

“Consequently, funds flew from 10 IREO Group companies to a M3M Group company, Misty Meadows, via five shell companies of M3M Group. The sum of ₹404 crore received from IREO Group by the five shell companies of M3M Group was further transferred to four M3M Group companies just to add layers for diversion,” the complaint said.

“Ultimately, ₹394 crore (out of ₹404 crore) was diverted to 17 M3M Group companies to add one more layer to the transactions. The remaining 10 crore was passed on to Misty Meadows. The diverted fund was ultimately parked in the accounts of 17 M3M companies.”

The ED said that while M3M accepted that 10 of these were its own or related entities, it denied the remaining seven entities. “However, during investigation the seven companies were also found to be M3M Group companies. Using this modus operandi, a sum of ₹404 crore was diverted for the development rights of a land which could not be developed for commercial purposes. Rather it was never intended to be developed as IREO Group did not apply for any license, no designs were prepared and no employees were hired for the project,’’ the charge sheet said.

The ED said that 28 companies, including M3M India Pvt Ltd, M3M India Holdings and Misty Meadows, were found guilty of contravening PMLA provisions as they have been actively involved in the commission of offence of money laundering. Key managerial persons of these 28 M3M Group companies, including Roop Kumar Bansal, were also suspected of money laundering under various sections of PMLA.

The ED has arraigned 15 new persons and 30 companies as accused in the supplementary prosecution complaint, besides six companies and one individual named earlier, as accused in the complaint filed before the Panchkula court on January 14, 2022.

Regarding Basant and his son, Pankaj Bansal, the ED said that investigations done till now has showed that both played active roles in money laundering. Investigations also showed that they destructed and tampered with evidence and were influencing witnesses, the ED said. The agency said that investigation against Basant and Pankaj Bansal, among others, was still going on to link the evidence.