JP Morgan used sham deals, shell firms to launder Amrapali home buyers’ funds to its Mauritian, Singapore entities: ED
05 Jun 2020

Employees of JP Morgan India Ltd, who were on the board of various Amrapali real estate group companies, “laundered” deposits worth Rs 187 crore of home buyers and “diverted” them to the multi-national financial advisory firm’s entities based in Mauritius and Singapore by undertaking sham transactions and using shell companies, the Enforcement Directorate [ED] has found in its probe.

The central probe agency submitted to the Supreme Court [SC] these findings of its investigation as part of a reply-affidavit after it attached Rs 187,34,92,519 in bank deposit of JP Morgan India Pvt Ltd at a bank branch in Mumbai on May 26 under the Prevention of Money Laundering Act (PMLA).

The company, during the last hearing of the case in the Supreme Court on May 27, had denied any wrongdoing and said that this attachment of properties by the ED was blatantly illegal as it was not part of any kind of financial dealing with the Amrapali Group.

The SC had asked the central agency to file a reply on this grievance raised by the company. The ED, through Additional Solicitor General Sanjay Jain, filed the reply in which it described the modus operandi of the company to allegedly launder the hard-earned money of home buyers who wanted to purchase an abode in Amrapali real estate projects.

The apex court, which is monitoring this case, had in December last year directed the ED and its Lucknow zone Joint Director Rajeshwar Singh, who was present in the court, to take action against JP Morgan under the anti-money laundering law and the Foreign Exchange Management Act (FEMA).

The top court had first cracked the whip in July last year on errant builders for breaching the trust of home buyers and ordered cancellation of Amrapali Group’s registration under the real estate law RERA and ousted it from its prime properties in the national capital region by nixing the land leases.

The ED probe in the case found the role of “shell companies” and “dummy directors” in perpetration of the alleged money laundering crime. “It is revealed in the PMLA investigations that the employees of JP Morgan India Ltd on board of Ms Amrapali Zodiac Developers P Ltd and Ms Amrapali Silicon City P Ltd were not only in complete control of the material decision of the respective companies and securing interests of the funds but they also indulged prima facie in money laundering to divert the home buyers’ funds to the tune of Rs 187 crore to JP Morgan India Property Mauritius Company-II in Mauritius and Ms JP Morgan IPF-I Singapore 2 PTE Ltd in Singapore,” the agency said in its affidavit that was accessed by PTI.

The employees have been identified as Gunjan Bahl, Hrushikesh Kar and Chanakya Chakravarty. The agency said the Mauritian company “was an active participant in the conspiracy from the very outset” and that JP Morgan India”played a key role in the remittance of diverted funds of the home buyers to Mauritius and Singapore.”

Read more by Press Trust of India via The Indian Express

RiskScreen: Eliminating Financial Crime with Smart Technology

Advance your CPD minutes for this content, by signing up and using the CPD Wallet

FREE CPD Wallet