A special court in Mumbai on Thursday sent the chairman and the managing director (MD) of Mumbai-based Omkar Realtors and Developers to the Enforcement Directorate custody till January 30, a day after they were arrested in a money laundering case.
“The accused Kamal Kishore Gupta (chairman) and Babulal Varma (managing director) were arrested for their involvement in the offence of money laundering and produced before the PMLA court, Mumbai,” the central probe agency said in a statement.
Special court judge A A Nandgoankar sent the duo to the ED custody till January 30, it said.
The ED arrested the duo on Wednesday in a case of money laundering linked to alleged irregularities in the development of a housing society in Mumbai under a Slum Rehabilitation Authority (SRA) scheme.
The company and the two executives are also facing allegations of “diverting” over Rs 400 crore loan from Yes bank.
The ED money laundering case against them has been filed after studying an FIR of the Aurangabad district police in Maharashtra that was registered under various sections of the Indian Penal Code (IPC) such as cheating and criminal breach of trust.
The ED quoted the police FIR to say that “Omkar Realtors and Developers Pvt Ltd and its directors bought a firm, Surana Construction, which had SRA rights for re-development of Anand Nagar SRA Cooperative Housing Society in Mumbai’s Wadala area.”
“However, Omkar and its promoters did not pay back the amount due to the seller and also mortgaged future FSI (floor space index) of the said SRA project and took huge amounts of loans,” the ED said.
The ED claimed its probe found “that loans to the tune of Rs 410 crore were diverted and not used for intended purposes”.
“No work of SRA building was undertaken. The requisite rules and procedures under SRA were ignored by the accused and documents relating to names of slum dwellers were forged to claim more FSI for mortgaging the same with banks for taking the loans,” the ED alleged.
Reacting to the arrests of its top executives, the company had said that it was “emphatic that Omkar Group is not in violation of any lending norms and slum approvals”.
The agency had raided 11 premises of the group and its promoters in Mumbai on January 25.
It claimed “incriminating documents including digital evidences were seized” during the raids.
The company, on the day of the searches, had called the ED action a “routine enquiry” and said the probe is linked to a matter related to some writ petitions filed against it before the Bombay High Court.
The company had said it had not diverted any funds and “has acted as per legal rules and regulations”.
The company had said that the “loan from Yes Bank is availed under banking guidelines as project loan against sale collaterals and utilised for the stated purpose only.”
“We will like to emphatically state that there are no diversions of any project fund availed by us in any project of the company,” the company had said.
Yes Bank co-promoter Rana Kapoor (63) and scam-hit Dewan Housing Finance Ltd (DHFL) promoters Kapil Wadhawan and Dheeraj Wadhawan were arrested by the ED last year and they are in judicial custody at present.
On Wednesday, the special court had remanded Kapoor to the ED custody till January 30 after her was arrested in a fresh money laundering case.
The ED had booked Kapoor, his family members and others under the Prevention of Money Laundering Act (PMLA) after studying a CBI FIR that alleged that dubious multi-crore loans were given by Yes Bank to various entities in contravention of the law and in lieu of purported kickbacks given to the Kapoor family.
The agency has accused Kapoor, his family members and others of laundering proceeds of crime worth Rs 4,300 crore by receiving alleged kickbacks in lieu of extending big loans through their bank that later turned non-performing assets.