The Gurugram ED Fraud Probe: How Homebuyers’ ₹205 Crore was Diverted to Sri Lanka

In a major development that has once again put the spotlight on real estate malpractice, the Enforcement Directorate (ED) has placed a Gurugram-based realty firm, Krrish Realtech, under intense scrutiny. This new chapter in the ongoing fight against financial crime centers around an ED fraud probe that alleges a massive misappropriation of public funds.

According to the ED’s chargesheet, the company and its promoter, Amit Katyal, are accused of defrauding over 400 homebuyers by illicitly collecting more than ₹500 crore for a residential plot project in Gurugram. The most shocking revelation from the investigation is that a significant portion of this money—specifically, ₹205 crore—was allegedly diverted to fund a hotel and real estate project in Colombo, Sri Lanka. This detailed summary will explain the key aspects of the case and the actions taken by the Enforcement Directorate.

Understanding the Allegations of Real Estate Fraud and the Role of the ED : ED fraud probe

The core of the matter lies in the alleged deception perpetrated by the realty firm. They reportedly enticed customers with the promise of residential plots on a 70-acre land parcel. However, the ED’s investigation revealed that the company did not even hold the necessary licenses to legally undertake such a project. This alleged lack of legal authority is a cornerstone of the ED fraud probe, demonstrating a clear intent to deceive from the very beginning. Instead of using the collected funds for their stated purpose, the money was allegedly siphoned off and routed through a series of shell companies to conceal the true financial trail.

The ED’s chargesheet explicitly names a shell company, Mahadev Infrastructure, as the vehicle used to divert the ₹205 crore to the Colombo project. This act of financial layering is a common tactic in money laundering schemes, making it difficult for investigators to trace the funds back to their origin. The investigation also found that some of the money was used to buy properties and land in the names of other “front” companies, as well as in the names of the promoters’ family members and employees. This multifaceted approach to money laundering underscores the complexity of the financial crime at the heart of the ED fraud probe.

The impact on the homebuyers is devastating. The ED’s findings confirm that the promoters never intended to hand over the plots. The agency’s investigation further revealed a series of alleged fraudulent attempts by the company to manipulate the situation to their advantage, including trying to create fictitious creditors and falsifying the list of plot buyers submitted to a Supreme Court-appointed committee. These actions, as highlighted by the ED fraud probe, demonstrate a deliberate effort to evade accountability and legal obligations. The homebuyers, who had invested their life savings, were left with nothing.

In response, the ED has taken decisive action, conducting searches and provisionally attaching assets to the tune of hundreds of crores. These attached assets include not only the land parcels in Gurugram but also the realty project in Sri Lanka that was allegedly funded by the diverted money. This move by the ED is crucial as it aims to recover the “proceeds of crime” and provide some measure of restitution to the victims. The legal process is now underway, with a local PMLA court having issued a notice to the accused, paving the way for further judicial proceedings.

This case is part of a broader trend of increased scrutiny by the ED on real estate firms suspected of financial misconduct. The promoter of Krrish Realtech, Amit Katyal, has been previously arrested in a separate money laundering case, further emphasizing a pattern of alleged fraudulent behavior. The vigilance of the ED in pursuing such cases under the PMLA is a critical step in restoring trust and transparency in the real estate sector. The ongoing ED fraud probe sends a powerful message that those who defraud homebuyers will face serious legal consequences and asset forfeiture. It is a reminder to the public to exercise extreme caution and conduct thorough due diligence before making significant real estate investments.

Source: Mint