An audit exercise of Amrapali Group's 47 companies took an interesting turn for the two statutory auditors appointed by the Supreme Court.
The auditors have stumbled upon almost 250 shell companies created by the realty firm to divert money across the world.
With the company is yet to disclose the name of these shell companies, the bench of Justices Arun Mishra and UU Lalit, gave a last opportunity to the group's Chief Finance Officer (CFO) Chander Wadhwa and the statutory auditors Anil Ajay Mittal and Co. to come clean.
Unhappy over their non-cooperation, which had enabled the two forensic auditors — Ravi Bhatia and Pawan Agarwal — to spot only 31 shell companies, the court directed them to file affidavits in the court. The affidavits will mention the list of companies with them or their families/relatives as Directors, the role they played in the financial transactions of the Amrapali Group, and the benefit accrued to them in monetary or other terms.
The auditors informed the court, "Every day, a new company is coming out in our inquiry. We are looking at a figure of 200 to 250 companies linked to the Amrapali Group where the wife, brother, and the relatives of statutory auditors and CFO are Directors. It seems not just the promoters of Amrapali, but even their statutory auditors and CFO were part of this syndicate."
The CFO, who was present in the SC, confessed that a sum of Rs 81 crore was paid to a company Rinku Computers that was re-routed to another Amrapali firm. Even statutory auditor claimed receiving Rs 50 to 60 crore by acting as a "conduit" in these shell companies to transfer money from one group firm to another.
Similarly, Amrapali Zodiac paid Rs 125 crore to Mannat Buildcraft, a shell company, through which money was routed to another shell company Rudraksh Limited, before it was paid to JP Morgan Mauritius. The auditors felt this was a possible violation of Foreign Exchange Management Act (FEMA). But JP Morgan's counsel present in court clarified that the company had advanced loans to Amrapali Group, a sum of Rs 140 crore for Silicon City and Rs 85 crore for Zodiac projects respectively. But the bench asked JP Morgan to state on affidavit how much money came in from Amrapali or its linked firms and whether it was done in accordance with RBI regulations.
On coming to know how Amrapali accounts were used to pay Rs two crore tax liability of CFO's wife and purchase a BMW 5-series car worth Rs 45 lakh that was gifted to CFO without consideration, the bench said, "The money of innocent homebuyers cannot be utilised in this manner." Considering Diwali break, the company Directors sought time to spend with families. Listing the case for November 13, the bench said, "You think of Diwali of these 46,000 people who have invested. Forget your Diwali. First disclose or else your auditors and CFO will also go to jail."