Ansal API diverted Rs 600 crore of homebuyers’ money: UPRERA
The Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has issued a show cause notice to Ansal API, the developer of Sushant Golf City hi-tech township in Lucknow, for alleged fraud, diversion of over Rs 600 crore of homebuyers’ money and delayed completion of housing projects.
UPRERA had imposed financial restrictions and ordered a forensic audit of 91 projects of Ansal API on October 25 last year following complaints from more than 400 homebuyers who alleged non-delivery of units/plots and failure to refund their money.
“The developer did not pay heed to the orders. We have issued notice for financial misappropriation and other serious violations on the basis of the findings of forensic audit report undertaken by Currie and Brown, which show that the realtor diverted Rs 606 crore of homebuyers from the township to its other subsidiaries and joint venture companies,” said UPRERA member Balvinder Kumar.
The developer has been given a month’s time to respond to the charges in the show cause notice failing which UPRERA has threatened to revoke its registration with the authority, impose fine and other necessary restrictions.
A site inspection survey carried out by the auditor revealed that only 3 per cent construction work was complete in projects launched in 2013.
“The developer also provided wrong and incomplete information in affidavits on projects registered with the authority,” states the March 29, 2019 notice issued by UPRERA secretary Abrar Ahmed to Ansal API’s full-time directors Sushil Ansal, Pranav Ansal and managing director Anil Kumar.
UPRERA had asked the realtor and its consortium companies not to sell, transfer or mortgage any property without informing the financial observer appointed by it and deposit 90 per cent of all its future proceeds in the designated escrow accounts of the projects concerned.
“It is a matter of serious concern that the promoter (developer) allotted the apartments or plots with false claims that he had possession of land and necessary approvals. He kept on collecting money without really starting work on these projects,” said an official at UPRERA.
Another official at the Authority, who did not wish to be named, said in Amrapali builders case, the Supreme Court had held that diversion of funds (homebuyers’ money) by a developer for activities not related to the project was a criminal breach of trust.
Claiming that he was yet to receive the UPRERA notice, Ansal API president Arun Mishra said: “We have not diverted any funds. We have given advances to farmers, landowners and contractors and the same is clearly reflected in our reports to auditors. I think the auditors have got their maths wrong.”
The realtor has been indicted and accused of fraud and gross anomalies in at least three government investigations on the township in the past.