- The court scrapped Amrapali’s registration under real estate laws
- The ruling can impact lenders’ efforts to recover dues
- The investigations will be done under the court’s supervision
A JPMorgan Chase & Co. unit violated country’s foreign investment rules and helped property developer Amrapali Group divert funds from realty projects, the Supreme Court said in a ruling and ordered an investigation.
The court on Tuesday ordered the central anti-money laundering agency to investigate Amrapali, based in Noida, for diverting funds overseas with the help of JPMorgan and others. The violations, based on a forensic audit, range from disregarding foreign investment norms, paying dividend without generating profits, setting up fake companies and overvaluing shares.
JPMorgan’s Singapore-based spokesman Chris Cockerill declined to comment. The biggest US bank is allowed to seek a review of the ruling. Any criminal charges will only be filed in a lower court once investigation is complete.
Developers, including Amrapali, Jaypee Infratech and Unitech, have been taken to courts by irate homeowners and creditors as apartment sales slumped in the once red-hot South Asian market following the triple whammy of a surprise cash ban, tax reforms and a consumer-protection law for the sector. Home prices in India’s financial capital dropped and unsold inventory rose 14 per cent in first half of 2019