The Enforcement Directorate (ED) has attached JP Morgan India’s accounts worth Rs 187 crore, besides documents related to its assets, for allegedly siphoning off homebuyers’ money in collusion with Amrapali Group.
The Supreme Court on Friday had allowed the agency to attach the investment banking firm’s assets to recover the amount identified as proceeds of crime under the Prevention of Money Laundering Act (PMLA).
This follows an investigation into the violation of forex rules involving foreign direct investment of Rs 85 crore and Rs 140 crore by JP Morgan India and Amrapali Group firms (Amrapali Zodiac Developers, Amrapali Silicon City), respectively, between 2010 and 2012. Even though the case was first examined under forex rules, the probe agency later also found the breach of anti-money laundering rules.
The attachment is provisional, which means it is valid for 180 days unless confirmed by the top court.
"This is for a period not exceeding 180 days, and the attachment will come into effect after the court confirms the final order,” said an ED official.
He said the attachment order had been issued under Section 5 of the PMLA, which deals with those in possession of proceeds of crime, which is likely to be concealed, transferred or dealt within a manner that would frustrate the proceedings relating to confiscation.
In a statement, JP Morgan India said it had received a provisional attachment order dated May 26 from the ED, “imposing a debit freeze to the extent of Rs 187.35 crore on one of its accounts”.
“JP Morgan India has neither invested in Amrapali Group companies nor received any proceeds from Amrapali Group companies. Offshore India property funds made foreign direct investments in two Amrapali projects in 2010 and 2012, in compliance with applicable laws. The management rights to these funds were transferred to Apollo Global Management in September 2018. We intend to vigorously defend ourselves against these claims in accordance with procedure established by law and have also filed an application in the Supreme Court to this extent,” the statement said.
The ED investigation had found that Amrapali Group and its directors created a web of shell companies and dummy directors in collusion with the foreign investor (JPMorgan) and diverted Rs 140 crore of homebuyers’ money. The funds were routed to shell companies using sham transactions by repurchasing the shares at a steep price.
In January, the apex court had allowed the ED to take into custody the defunct group's CMD, Anil Kumar Sharma, and two other directors, Shiv Priya and Ajay Kumar, for interrogation on alleged money-laundering charges.
On December 2, 2019, the ED had informed the top court that it had prima facie found evidence of violation of forex rules by the multinational firm and recorded the statements of the country head of the company with regard to dealings with Amrapali Group.
Besides, the ED had examined at least 19 persons and entities. The total foreign exchange transaction in these entities was pegged at Rs 1,100 crore, according to an ED's initial estimation.