Cannot say there is diversion of funds in 25 projects audited, says Greater Noida CEO

The authority had in November 2017 hired international agency Currie & Brown to audit accounts of errant builders to ascertain if they diverted funds collected from homebuyers for other purposes.

The Greater Noida authority chief executive officer Debasish Panda said he “he cannot say that there has been a diversion of funds“ in 25 builder projects, which have been audited by a private agency.

The CEO said he has directed Currie & Brown to start the audit of another 25 builders who are to deliver around 63,000 flats. (Sunil Ghosh/HT Photo)

The authority had in November 2017 hired international agency Currie & Brown to audit accounts of errant builders to ascertain if they diverted funds collected from homebuyers for other purposes.

In the first phase, the authority had asked Currie & Brown to the accounts of 25 builders. There are 36,000 housing units in these housings projects. The audit was supposed to cover 11 points— builders’ current financial capacity, funds collected from buyers, land bank and money spent on construction and other purposes, among others.

“We cannot say that these 25 builders have diverted funds. But, yes, one or two builders of the 25 had loaned some parts of the fund meant for one project to another housing project. But that is not considered a “diversion”. Now our focus is to help builders revive stuck housing projects and get them to deliver flats to buyers who are suffering,” Panda said.

On September 12, chief minister Yogi Adityanath had directed the CEOs of Noida, Greater Noida and Yamuna expressway authorities to audit builders, who have failed to deliver flats to homebuyers. The directive came after homebuyers demanded an audit of builders as builders were unable to hand over flats citing a shortage of funds to complete the projects. It was alleged that the funds collected against flats were diverted to other projects.

Panda, however, sidestepped one crucial question— if the builders did not divert funds, then where did the money collected from buyers go?

“See, our objective is not take any extreme step that hampers the delivery of stuck housing projects. We have directed these 25 builders to prepare a mitigation plan for their respective projects and detail the ways as to how they will finish the projects without any further delay,” Panda said.

Once the builders submit the mitigation plan for these 25 stuck projects, the authority will convene meetings of builders and buyers.

“We have decided to organise a meeting of builder and buyers for each project. We will put the audit reports on the table and ask the builder and buyers to decide on the way out. The authority will monitor and help the builders and buyers,” Panda said.

Some builders said they can finish a stuck project if buyers start paying the remaining flat cost. “We can help builders and buyers devise a new method — such as an escrow account — if the buyers do not trust the builder. Then, buyers will have the option of paying the remaining flat cost and that can help deliver the flats without further dispute,” Panda said.