Supertech Chairman RK Arora Sent To ED Custody Till July 10 In Money laundering Case

R K Arora was arrested on Tuesday under the Prevention of Money Laundering Act following 3 rounds of questioning. The ED is probing 26 FIRs filed by EOWs of Delhi, Haryana, and UP police.

The ED in its application said that Arora's interrogation is necessary to uncover the larger conspiracy involved in the case, the report said.

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The Enforcement Directorate (ED) has been granted custody of R K Arora, the chairman and promoter of Supertech Group, until July 10 by a Delhi court, reported PTI. Arora was arrested in connection with a money laundering case. As per the report duty Sessions Judge Devender Kumar Jangala remanded Arora in ED custody to facilitate further interrogation by the agency.

The ED in its application said that Arora's interrogation is necessary to uncover the larger conspiracy involved in the case, the report said. Arora was arrested on Tuesday under the criminal sections of the Prevention of Money Laundering Act (PMLA) following three rounds of questioning.

"Considering the facts and circumstances of the case and to unearth the complete conspiracy, I am of the considered opinion that the custody remand of the accused Ram Kishor Arora is necessary. Accused Ram Kishor Arora is accordingly remanded to ED custody till July 10, 2023," the court said in its remand order, as per PTI.  The order further said that in accordance with the law laid down by the Supreme Court, Arora should be interrogated at a place that has CCTV coverage, and footage of the interrogation be preserved.

The ED is investigating 26 FIRs filed by the Economic Offences Wing (EOW) of the Delhi, Haryana, and Uttar Pradesh police against Supertech Ltd. and its group companies. The charges include criminal conspiracy, cheating, criminal breach of trust, and forgery. The allegations state that the company defrauded around 670 home buyers of Rs 164 crore.

According to the ED, Supertech and its directors conspired to cheat people by collecting funds from prospective home buyers as advance payments for flats in their real estate projects. However, the company failed to fulfill its obligation of delivering the flats on time, resulting in fraudulent activities and causing financial harm to the public.

The ED claimed its probe revealed the funds were collected by Supertech Limited and other group companies from home buyers. Additionally, the company also took project-specific term loans from banks and financial institutions for the purpose of construction of housing projects.

However, ED's investigation revealed that the funds collected from home buyers were illicitly diverted towards purchasing land in the name of other group companies. These properties were then used as collateral to secure loans from banks and financial institutions. Furthermore, the Supertech group defaulted on loan repayments, resulting in approximately Rs 1,500 crore of outstanding loans becoming non-performing assets (NPA).

Established in 1988, Supertech Ltd has achieved success in delivering approximately 80,000 apartments primarily in the Delhi-NCR region. Currently, the company is actively involved in the development of about 25 projects across the National Capital Region (NCR). However, concerns have arisen as the company has yet to provide possession to over 20,000 customers, creating dissatisfaction among its clientele.

Supertech Ltd has faced ongoing challenges, particularly since last year. In August, the company encountered a major setback when its twin towers, Apex and Ceyane, standing nearly 100 meters tall and situated on Noida Expressway, were ordered for demolition by the Supreme Court. The court found that these towers were constructed within the Emerald Court premises in violation of established regulations. The demolition process involved the use of over 3,700 kilograms of explosives.

As per the report, RK Arora had then said the company incurred a loss of about Rs 500 crore, including construction and interest costs, because of the demolition.

In March of last year, Supertech Ltd faced further challenges when the Delhi bench of the National Company Law Tribunal (NCLT) initiated insolvency proceedings against the company based on a petition filed by the Union Bank of India. The petition was filed due to non-payment of dues totaling around Rs 432 crore.

Supertech Ltd contested this order and appealed to the National Company Law Appellate Tribunal (NCLAT). In June, the NCLAT ruled that insolvency proceedings would only apply to one specific housing project of Supertech Ltd, rather than the entire company.

Additionally, the NCLAT directed the establishment of a Committee of Creditors for the Eco Village 2 project, located in Greater Noida (West).

Earlier this month, Supertech Ltd received permission from the Supreme Court to raise approximately Rs 1,600 crore from institutional investors. This funding is intended to be used for the completion of 18 ongoing housing projects across Delhi-NCR under the main company, Supertech Ltd. It is important to note that several other housing projects are being executed by different companies within the Supertech Group.