The Enforcement Directorate (ED) has arrested Supertech Owner RK Arora under the Prevention of Money Laundering Act (PMLA).
According to reports, there were cases of cheating with buyers in different police stations of Uttar Pradesh after which ED started its investigation under PMLA.
In the investigation, it was found that a huge amount was collected from the buyers in the name of flats, however, they were not given possession on time.
Not only this but loans taken from the banks in the name of the project were also used against the rules.
Arora was taken into custody following a third round of his questioning at the federal agency's office, they said. He is expected to be produced before a special PMLA court here on Wednesday, where the ED will seek his further remand.
The money-laundering case against the Supertech group, its directors and promoters stems from a clutch of FIRs registered by the police departments in Delhi, Haryana and Uttar Pradesh.
In April, the ED had attached assets worth more than Rs 40 crore of the real estate group and its directors.
In a statement in April, the ED said the company and its directors indulged in a "criminal conspiracy" to cheat people by collecting funds from prospective buyers as advance against booked flats in their real estate projects and failed to adhere to the agreed obligation of providing the possession of the flats on time and thus, according to the FIRs, the firm "defrauded" the general public.
The agency's probe revealed that the funds were collected by Supertech Limited and group companies from homebuyers. The company also took project-specific term loans from banks and financial institutions for the purpose of construction of projects or flats, the ED said.
However, these funds were "misappropriated and diverted" for buying land in the name of other group companies that was again pledged as collateral to borrow funds from banks and financial institutions, it added.
The Supertech group also "defaulted" on its payments to the banks and financial institutions and currently, around Rs 1,500 crore of such loans have become non-performing asset (NPA), the agency had said.
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