Facing heat at home from investors, Amrapali Group faces fraud charges — in Africahttps://indianexpress.com/article/india/facing-heat-at-home-from-investors-amrapali-group-faces-fraud-charges-in-africa-5316637/

Facing heat at home from investors, Amrapali Group faces fraud charges — in Africa

The Southeast African country has accused the real estate firm of defrauding it of US$13.92 million (over Rs 97 crore) by presenting two guarantees from an Italian bank which was found to be non-existent.

Facing heat at home from investors, Amrapali Group faces fraud charges — in AfricaFacing heat at home from investors, Amrapali Group faces fraud charges — in Africa
The Amrapali Group is already in the dock in the Supreme Court for its failure to provide promised homes to around 40,000 buyers in over 25 projects, even years after the expiry of deadlines. (Reuters photo/Representational purpose)

Mozambique has terminated a contract it signed three years ago with Noida-based Amrapali group of developers for a residential project to be built there with financial assistance from New Delhi. The Southeast African country has accused the real estate firm of defrauding it of US$13.92 million (over Rs 97 crore) by presenting two guarantees from an Italian bank which was found to be non-existent.

The Amrapali case dates back to July 2013 when the Indian government, through the Exim Bank, extended a Line of Credit of US $47 million to the Government of Mozambique for construction of 1200 houses there, 400 each in the provinces of Zambezia, Tete and Cabo Delgado.

As per documents accessed by The Indian Express, a contract was signed on February 6, 2015 between Fundo Para O Fomento De Habitacao (FFH), a public entity in Mozambique, and Ultra Home Constructions (P) Ltd, a company promoted by the Amrapali group, for construction of 400 houses in Tete.

On August 21, 2015, the FFH, documents show, released an advance payment of $13.922 million to Ultra Home, after the latter produced an advance payment guarantee and performance guarantee from Italy-based International Trade Bank Ltd, which was later found to be non-existent, both by FFH and Exim Bank.

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READ | Supreme court slams Amrapali Group: Fraud and dirty games

When work did not begin as scheduled, the FFH began sending frantic reminders to Ultra Home. Exim Bank too stepped in and the three parties held a meeting on July 5, 2016, during which the Amrapali promoters reportedly promised to start work soon.

When work did not start on the project despite several reminders over the next one year, the FFH decided to encash the guarantees given by Ultra Home, only to discover that the Italy-based bank that issued these was not even in existence. Finally, in a letter dated March 6, 2017, it sent a notice to Ultra Home, accusing it of “fraud”. The FFH said it was terminating the contract.

By then, the Exim Bank too had made its own enquiries but could not trace the existence of the bank. On February 6, 2017, Trupti Mhatre, Assistant General Manager of Exim Bank, wrote to Anil Kumar Sharma, Chairman, Ultra Home Constructions (P) Ltd: “Even Exim Bank could not trace the existence of the International Trade Bank Limited, Italy from the Banker’s Almanac database.”

Reached for comment, an official at Exim Bank acknowledged the case but declined to go into details, saying it’s “a very sensitive matter between two governments”.

Prashant Kumar, Amrapali group’s project in-charge in Mozambique and one of its spokespersons, declined comment.

The Amrapali Group, which controls Ultra Home, is already in the dock in the Supreme Court for its failure to provide promised homes to around 40,000 buyers in over 25 projects in Noida and Greater Noida, even years after the expiry of deadlines.

The company has taken the stand that it lacks financial resources to deliver on its promise, but the apex court has taken a stern view of diversion of flat buyer money. Last month, the Supreme Court ordered freezing of accounts of all Amrapali firms and those of its directors after it spotted diversion of around Rs 2,700 crore paid by flat buyers.

The apex court also ordered Amrapali promoters to furnish the list of all their projects and assets.