UPRERA cracks whip on Ansal API, imposes restrictions

The Uttar Pradesh Real Estate Regulatory Authority (UPRERA) on Thursday ordered forensic audit of Ansal API and its subsidiaries – the promoters of Sushant Golf City hi-tech township on Sultanpur Road – for alleged fraud and diversion of money collected from home-buyers.

The real estate regulator has asked the realtor and its consortium companies not to sell, transfer or mortgage any property without informing the financial observer appointed by it and deposit 90 per cent of all its future proceeds in the designated escrow accounts of the concerned projects.

“It is a matter of serious concern that the promoter (developer) allotted the apartments or plots with false claims that he had possession of the land and necessary approvals. He kept on collecting money without really starting work on these projects. The money should be available with the promoter. But it’s a cause of alarm that there is no money available with the promoter, as stated by his counsel,” said UPRERA member Balvinder Kumar.

Prima facie, the authority is of the view that the promoter seems to have indulged in financial mismanagement, including diversion of funds for activities not related to the concerned projects, he said and added that forensic audit was being ordered to protect the interest of allottees/home-buyers and to ensure completion of unfinished projects.

The regulator said it has received claims for refund of ₹60 crore from complainants so far but keeping in mind the delay penalty, the promoter would need about ₹150 crore to discharge these liabilities.

Ansal API has been directed to submit, within 15 days, project-wise details of escrow accounts, list of incomplete projects and funds required to complete them along with timelines, list of allottees, payments and overdue amount to be realized in future and details of allottees who have paid advance money but have not been allotted any property.

The seven-page order was passed by the authority’s chairman Rajive Kumar and its other members Bhanu Pratap Singh and Kalpana Mishra after hearing 403 complaints received against the developer, who has collected crores of rupees and registered 91 projects with UPRERA.

The realtor has already been indicted by two government probe panels and a UP lawmakers’ panel is all set to meet on November 1 to recommend action on their findings.

New Delhi-based audit firm Currie and Brown has been short-listed and given two months’ time to finish the audit.

Unlike financial audit, a forensic audit is carried out for detection and gathering of evidence of frauds, embezzlement and diversion of funds. The cost of the audit would be charged on the promoter.

The audit of the most challenged project would be completed first and the reports would suggest ways and means for completing stuck up projects.