New Delhi, Nov 13 (IANS) The Enforcement Directorate (ED) on Thursday arrested Manoj Gaur, former CMD of Jaypee Infratech Limited, in a money laundering case involving misuse of home-buyers’ money and delay in projects around Noida, an official said.

Gaur, former Executive Chairman and Chief Executive Officer of M/s Jaiprakash Associates Ltd. (JAL), was arrested under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002.

The ED probe found that out of approximately Rs 14,599 crore collected by JAL and JIL from homebuyers (as per claims admitted by NCLT), substantial amounts were diverted for non-construction purposes, the official said in a statement.

The ED initiated an investigation against the Jaypee group based on multiple FIRs registered by the Economic Offences Wings (EOW) of Delhi and Uttar Pradesh Police, based on complaints filed by homebuyers of Jaypee Wishtown and Jaypee Greens projects, alleging criminal conspiracy, cheating, and criminal breach of trust against the company and its promoters.

It has been alleged that the funds collected from thousands of homebuyers for the construction and completion of residential projects were diverted for purposes other than construction, leaving the homebuyers defrauded and their projects incomplete, the ED said in a statement.

The funds were siphoned off to related group entities and trusts, including Jaypee Sewa Sansthan (JSS), M/s Jaypee Healthcare Ltd. (JHL), and M/s Jaypee Sports International Ltd. (JSIL).

It has also been revealed during the investigation that Manoj Gaur is the Managing Trustee of Jaypee Sewa Sansthan (JSS), which received part of the diverted funds, the ED said.

The Enforcement Directorate had May 23 carried out searches at 15 premises linked to Manoj Gaur’s flagship real estate development companies — Jaypee Infratech Ltd., and Jayprakash Associates Ltd, as well as their associated entities.

These searches were conducted in Delhi, Noida, Ghaziabad, and Mumbai, including the offices and premises of M/s Jaiprakash Associates Ltd. and M/s Jaypee Infratech Ltd. During the searches, the ED seized a large volume of financial and digital records, along with documents evidencing the offence of money laundering and diversion of funds.

During the operation, officials seized cash to the tune of Rs 1.7 crore, along with financial records, digital data, and property documents registered in the names of promoters, their family members, and group companies.

IDBI Bank had first filed a petition against Jaypee Infratech Limited (JIL) in the National Company Law Tribunal (NCLT), Allahabad, after JIL defaulted on a payment of over Rs 526 crore. The NCLT initiated the insolvency process on August 9, 2017.

The insolvency case gained national attention due to over 21,000 homebuyers, who had booked flats in JIL projects, being left in the lurch as money had been diverted from construction projects, primarily in Wish Town, Noida.

The Supreme Court intervened to protect their interests, eventually leading to an amendment to the IBC that classified homebuyers as financial creditors, giving them a vote in the resolution process.

The case involved extensive legal proceedings, including disputes over transactions where JIL’s assets were mortgaged to secure the debts of its parent company, Jaiprakash Associates Limited (JAL).

After several rounds of bidding, the National Company Law Appellate Tribunal (NCLAT) approved a resolution plan submitted by the Suraksha Group in May 2024. Under this plan, Suraksha is to complete the unfinished projects and pay enhanced compensation to farmers as part of the land acquisition terms.

–IANS

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