The ED on Wednesday alleged R K Arora, owner of real estate company Supertech, was the group's main controlling person who decided to "divert" investors and homebuyers money worth crores of rupees to various shell companies.
Ram Kishor Arora was arrested under the anti-money laundering law on Tuesday. Earlier on Wednesday, he was sent to Enforcement Directorate (ED) custody till July 10 by the court of Duty Sessions Judge Devender Kumar Jangala.
"The arrest is made in connection with the investigation being done against the Supertech Group for diverting, siphoning off and misappropriating funds of investors and customers," the ED said in a statement.
The money laundering case, filed under the criminal sections of the Prevention of Money Laundering Act (PMLA), stems from as many as 26 FIRs registered by Delhi, Haryana and Uttar Pradesh police against Supertech Limited and its group companies on allegations of cheating 670 homebuyers to the tune of Rs 164 crore.
"Huge amounts of money running into hundreds of crores (of rupees) were siphoned off through Supertech Group and they failed to adhere to their agreed obligations to provide the possession of flats to customers on time," the ED said.
It claimed that the Supertech Group "siphoned off Rs 440 crore received from customers and homebuyers for purchasing land in Gurugram in 2013-14 at highly inflated prices while their already promised projects in Noida were not completed".
A new project was launched on this newly acquired land and further advance was collected from hundreds of homebuyers and loans were taken from banks and non-banking financial companies (NBFC) which also became NPA (non-performing assets) and were declared "fraud" by banks, it alleged.
"Similarly, Rs 154 crore was misappropriated by Supertech for acquiring land in (the name of) another shell company in the same time period. Also, Rs 40 crore was siphoned off to another shell company and land was purchased in its name in Delhi," the ED said.
The agency said the company and its promoters diverted the funds to shell companies instead of completing its projects, which remain incomplete till date (2023).
"During this period, Ram Kishor Arora, the promoter of Supertech, was the main controlling and decision-making authority for Supertech Group and decided to divert the investors' money to various shell companies," it alleged.
It said the "custodial interrogation" of Arora was necessary for investigation as he was "avoiding" questions and giving "misleading" replies.
Supertech Limited, which was formed in 1988, has so far delivered around 80,000 apartments, mainly in Delhi-NCR. The company is currently developing around 25 projects across NCR. It is yet to give possession to more than 20,000 customers.
The company has been in crisis since last year.
In August 2022, Supertech suffered a huge setback when its nearly 100-metre-tall twin towers -- Apex and Ceyane -- located on the Noida Expressway were demolished following a Supreme Court order after it found that their construction within Emerald Court premises was in violation of norms.
More than 3,700 kilograms of explosives were used to demolish the two towers.
Due to the demolition of the twin towers, Arora had said, the company incurred a loss of about Rs 500 crore, including construction and interest costs.
The company suffered another blow in March last year when the Delhi bench of the National Company Law Tribunal (NCLT) ordered insolvency proceedings against it over a petition filed by the Union Bank of India for non-payment of dues of around Rs 432 crore.
Arora challenged this order before the National Company Law Appellate Tribunal (NCLAT), which ordered insolvency proceedings against one of the housing projects of Supertech Limited and not the entire company.
The NCLAT also directed the constitution of the Committee of Creditors for the Eco Village II project located in Greater Noida (West).
The company recently got permission from the Supreme Court to arrange around Rs 1,600 crore from institutional investors to complete 18 ongoing housing projects across Delhi-NCR under the main firm Supertech Limited, Arora said earlier this month.
Apart from these 18 projects, there are some housing projects under different companies of the Supertech Group.