Amrapali CMD, directors used homebuyers’ money for wedding, homes, jewellery, cars

NEW DELHI: Detailing how Amrapali CMD Anil Sharma and other directors ran the real estate company as a personal fiefdom, forensic auditors told the Supreme Court that homebuyers’ money was used to fund a wedding and acquire luxury cars, houses, jewellery and investments in mutual funds and shares.
Auditors Pawan Kumar Aggarwal and Ravi Bhatia filed their report after a forensic audit of 46 registered companies and numerous shell companies of Amrapali group and bank accounts of the directors. They provided a graphic account of how Rs 3,500 crore of homebuyers’ money was diverted for purposes other than construction. The report also said unexplained cash deposit of Rs 12 crore was received by Sharma and director Shiv Priya during demonetisation in 2016.
In a voluminous report running into more than 2,500 pages, the auditors said the directors and their family members were beneficiaries. It said Sharma and four directors were illegally paid Rs 67 crore as professional fees despite being salaried persons of the company that meant they were not entitled to any such fees.
“A person can either be in whole time employment of a company or provide professional services to companies. However, a person cannot enjoy salary income and earn professional income at the same time from the same company. Directors received huge amounts of money in the form of professional charges from Amrapali group for which neither any agreement nor any proof of service was provided by them,” the report said.
Interestingly, payments by way of professional fees were made when personal expenses were to be incurred. “It has been observed that professional fee was received as and when there was requirement of directors for personal investment/wedding of daughter/any other personal requirement,” the report said.
The money paid had no co-relation with the work done by the directors. “Primary purpose of the professional fee was to meet their personal requirement of money for paying housing loans, purchasing cars, for buying jewellery, etc. For this purpose, the directors diverted money received from homebuyers to their personal accounts. Professional fee was booked as per the wish and desire of directors and did not have any fair basis,” the report said.
The auditors told the SC that Sharma received Rs 52 crore from the company as salary and for rendering professional services between 2008 and 2016 and Shiv Priya got Rs 35.91 crore during the period. It said Sharma spent Rs 1.38 crore of company funds on his daughter’s wedding.