Homebuyers claim Jaiprakash Associates diverted more than Rs 10,000 crore from its subsidiary Jaypee Infratech, in the construction of Yamuna Expressway and other real estate projects. The latter is currently under insolvency.
In an application filed with the Supreme Court by Trilegal, a legal firm representing the 2,500 buyers of Jaypee Wish Town in Sector 128, Noida, buyers have sought a forensic audit of the accounts of Jaypee Associates Limited (JAL) and Jaypee Infratech Limited (JIL).
The allegations are based on a report by accountancy firm ASA Financial Services. It was found that JAL had used the land bank of JIL as security for getting loans.
According to the ASA report, JIL claims to have spent an amount of Rs 13,283 crore towards construction and development of Yamuna Expressway. This translates to Rs 80.5 crore per km after indexing inflation as per the consumer price index. However, it was found that for constructing the comparable six-lane concrete Mumbai-Pune Expressway, Rs 34.32 crore per km after indexing inflation was spent.
JAL, according to the report, might have potentially received an excess payment of approximately Rs 46 crore per km for the construction of the Yamuna Expressway. This amount adds up to approximately Rs 7,500 crore for the 165-km-long Yamuna Expressway.
The report also found that JAL might have overbilled JIL by at least Rs 3,000 crore for construction and development of the latter's real estate projects. JAL also appears to have taken out an amount of approximately Rs 18,000 crore from JIL while investing only Rs 2,000 crore in it.
The application filed by homebuyers also said that JAL also transferred JIL's lands for settling its loans. The application cites 967 acres of JIL land as security for JAL loans, and a transfer of 476 acres of land — worth Rs 2,600 crore — for settling loans.
The Allahabad bench of the National Company Law Tribunal (NCLT) declared Jaypee Infratech insolvent on August 9 on a petition filed by IDBI Bank under the Insolvency and Bankruptcy Code 2016. Jaypee had defaulted on a loan of Rs 526 crore to the bank.
The Supreme Court on September 11 asked JAL to deposit Rs 2,000 crore by October 27 to pay off the aggrieved homebuyers.
The builder had said to the Supreme Court that it wanted to sell off the Yamuna Expressway to raise money and had an offer in hand for Rs 2,500 crore. The apex court, however, denied permission to sell off Yamuna Expressway, while extending the time to deposit Rs 2,000 crore until November 5.
However, on the company's failure to deposit the money on time, the apex court has now directed all the directors, except institutional ones, to be personally present in the next hearing on November 22, while also asking them to disclose their personal assets.
