ED arrests director of Bengaluru-based property group for money laundering

On June 23, the Enforcement Directorate informed that it had arrested the real estate group Mantri Developers Pvt. Ltd. Director Sushil P Mantri in a money laundering investigation linked to the alleged deception of numerous homebuyers.

Mantri was brought before a special Prevention of Money Laundering Act (PMLA) court in Bengaluru, which sent him into ED custody for 10 days, he said in a statement.

Earlier, money laundering case against the group and its promoters in March by ED after investigating a Bengaluru Police FIR registered against them in 2020.

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“Many homebuyers have filed complaints with the police as well as the ED alleging that accused entities/persons are involved in money laundering and enticing potential buyers with schemes painted in pink, showing brochures misleading, falsifying delivery times and display cases and collected more than 1,000 crore upfront from thousands of buyers,” the ED said.

“However, they did not get possession of their apartments even after 7-10 years,” ED added.

According to ED’s allegations, the company offered various “Ponzi-type schemes which were named as a buyout scheme and an advance of money was collected for the apartments/houses”.

Moreover, the company did not refund the amount to the buyers even after a clear instruction from the Real Estate Regulatory Authority (RERA) in some cases.

The ED investigation revealed that the amount collected from the buyers by the company and intended for the construction of the projects has been misappropriated for personal use by the management of the company or for other fraudulent purposes and therefore the project is blocked .

According to the details, the company has a total loan outstanding of approximately 5,000 crore from various financial institutions, of which about 1,000 crore is overdue and part of the loan has been qualified as a non-performing asset (NPA), the ED said.

“The company has guaranteed its assets to different financial institutions for taking out multiple loans on the same assets,” he said.

With entries from PTI.

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