SC raps Amrapali CFO, auditors over diversion of funds

NEWDELHI: The chief financial officer (CFO) and internal auditors of Amrapali Group were grilled on Friday by the Supreme Court over alleged diversion of funds.

A bench led by Justice Arun Misra also said the group’s CMD as its two other directors would continue to remain under police surveillance at a hotel in Noida.

The apex court perused an interim report submitted to it by court-appointed forensic auditors and sought details of 23 dummy companies which the real estate group claimed were created as special purpose vehicle (SPVS). The bench sought details of all the bank accounts of all companies under the group.

The CFO had earlier feigned “memory loss” when he was questioned by auditors.

The Amprali Group had earlier been ordered to handover its laptops, computers and harddrives used since 2008 to the forensic auditors. The two statutory auditors, Anil Mittal and Ravi Kapoor, were also told to handover all documents. They were warned of a jail term in case of non-compliance.

Banks having accounts of Amrapali were directed to release all statements from 2008 in three days so that the court-appointed forensic auditors could look into them. The police was ordered to seize documents from the firm’s internal auditors in three days and hand them over to the forensic auditors.

“We request the police to collect the documents from Dhavan and Company and Anil Mittal and Company (internal auditors),” the bench recorded.

Forensic auditor Pawan Kumar Aggarwal told the court money collected from home buyers was diverted, for which some shell companies were created.

Terming it as a “sorry state of affairs”, the court sought details of incorporation, financial details, including bank accounts of four companies — Gaurisuta Infrastructures Pvt Ltd, Mannat Buildcraft Pvt Ltd, Vidhyashree Buildcon Pvt Ltd and Jhamb Finance & Leasing Private Limited. As per the forensic audit, ₹242.38 crore had been diverted by Amrapali Group firm to them.

The SC was also told that nephews of internal auditor Anil Mittal — Ashish Jain and Vivek Mittal — were the directors of Gaurisuta Infrastructures.

The bench granted the CFO one last opportunity to cooperate with the forensic auditors. He too was warned of jail on ground of professional misconduct.

The CFO was asked to furnish the details of his salary, benefits he had obtained from the Amrapali Group and in how many company he is a director, along with his bank details. The firm’s auditors were also pulled up for overlooking “shady transactions”. The bench said it was a “deliberate fraud” to not mention the diversion of funds in the firms’ audit report. “No relief can be granted to them till all the documents are received to the satisfaction of forensic auditors. If there is non-compliance of court’s order, we may send them to appropriate place. They are currently living in an honourable place in a hotel,” it observed.