Supertech, its promoter diverted ₹638crore: ED

At least ₹638 crore collected from homebuyers and borrowed from the banks were diverted by Supertech Group and its chairman Ram Kishor Arora to buy properties in Gurugram at inflated prices instead of completing existing projects in Noida, the Enforcement Directorate (ED) said while producing Arora before a Delhi court on Wednesday, where it sought his 14 days custody.

Arora was arrested by ED in a money laundering case on Tuesday. The court sent Arora to ED custody till July 10.

“The total proceeds of crime estimated in the case, so far, comes to around ₹638.93 crore which was diverted by Supertech Group and its promoters/directors to their group companies for purchase of properties and the company with land having much lesser value. The funds diverted by the group had been collected from homebuyers and banks or financial institutions for use in specific projects. The diversion of funds by the accused companies and individuals led to default on part of the accused companies from banks or financial institutions,” ED said in its remand note, reviewed by HT.

Detailing the diversions, ED said ₹444 crore “from accumulated funds in its accounts which were directly from advance collections from customers and borrowed from banks” were paid by Supertech to buy a company – Sarv Realtors Private Limited in 2013-14.

Sarv was bought to purchase a 27.5-acre land parcel to launch another project without completing the ongoing projects for which the funds were originally meant, ED said.

Subsequently, ₹154 crore was credited by Supertech to another company, ASP Sarin, to purchase another land. ASP, termed a shell company by ED, had “no actual turnover or income”, ED said, adding that Supertech transferred ₹39 crore to Palash Building Solutions for payment to land sellers for land parcels in Delhi.

ED has alleged that Arora was also the “deciding authority” in diverting the funds to these companies. When asked about the siphoning off of funds during questioning, Arora gave “evasive replies” to the ED officers, they said.

“However, upon confronting him with the bank account statements of the companies and other accounts of Supertech Group, Arora admitted that the money is effectively homebuyer’s installments,” ED added.

Calling him the prime conspirator of the fraud, ED said Arora cheated more than 600 homebuyers and “acquired, possessed, layered and utilised the proceeds of crime siphoned off from the ongoing projects gradually through various shell companies as identified during the investigation and corroborated by various financial documents.”

Homebuyers in lurch

Around 30,000 homebuyers, who failed to get flats or are unable to get their flats registered in their names in housing projects of Supertech, are continuing to suffer after Arora’s arrest.

Arora had claimed that he was going to get ₹1,600 crore in July to be spent on construction and delivery of unfinished flats, but now buyers are sceptical now that ED slapped money laundering charges against the Supertech chairperson.

“We have learnt that his bail application was also rejected on Wednesday, and he has been remanded in judicial custody. That means the chairperson will be unavailable for day-to-day decision-making in Supertech, affecting the construction and delivery of units, which were already delayed. We have been waiting for our flats since the past seven years. Whenever we have some reason to hope, something negative happens. We do not know how to get justice,” said Bharat Arora, who booked a 3BHK flat in 2014 in Supertech Romano project in Noida’s Sector 118.

Bharat Arora, 67, was supposed to get his unit by the end of 2016, but even seven years later, the flat was far from ready.

On May 11, 2023, Supertech Limited informed the Supreme Court during a case hearing that he has got approved ₹1,600 crore funds from US-based Oaktree Capital Management to be spent on construction and delivery of units.

“We do not know how this funding will come now that the company chairman is behind bars. Without these funds, the delivery of the units will again be delayed. We demand that the Uttar Pradesh government must address this issue without further delay,” said homebuyer Pravesh Kumar, who was waiting for his flat in Supertech Ecovillage project in Greater Noida.

Supertech had assured homebuyers to deliver 20,000 unfinished units and also pave the way for the registry of around 10,000 units where homebuyers have already shifted despite the projects being only partially ready.

The Noida authority chief executive officer Ritu Maheshwari refused to comment saying the matter is now between ED and the realtor.

Noida authority officials said they are struggling to recover ₹3,000 crore land cost dues from Supertech against different projects such Supernova, Romano, North Eye, and CapeTown, among others. The Greater Noida authority needs to recover ₹1,500 crore and the Yamuna Expressway Industrial Development Authority needs to recover ₹1,000 crore from the realty firm, said officials.

A Supertech spokesperson did not comment on the developments when contacted by HT.