Amrapali Diverted Homebuyers' Money To Companies Linked To Dhoni & Sakshi, Report SC Appointed Auditors

The Supreme Court's July 23 verdict cancelling Amrapali Group's RERA registration has also brought under the scanner acclaimed wicketkeeper-batsman and former Indian cricket team skipper Mahendra  Singh Dhoni and his wife Sakshi Dhoni.

The auditors appointed by the Supreme Court to look into Amrapali group's dealings have observed that the maligned real-estate giant "illegally diverted" the hard-earned money of over 49,000 home-buyers to Rhiti Sports Management Pvt Ltd, an entity in which the cricketer holds major stakes.

Pawan Kumar Aggarwal and Ravinder Bhatia, the Court appointed auditors, also reported the existence of "sham" agreements with Amrapali Mahi Developers Pvt Ltd, in which Sakshi happens to be a Director and which Dhoni (nicknamed "Mahi") had himself endorsed until 2016 before he distanced from the brand in view of the cheated home-owners' revolt.

Based on findings that Amrapali had siphoned off homebuyers' money with the connivance of authorities of Noida and Greater Noida, the Court cancelled the registration of Amrapali group under Real Estate (Regulation and Development) Act 2016, and directed the state-owned National Building Construction Corporation take over its pending construction projects in Greater Noida and Noida.

The 270 pages judgment of the bench of Justices Arun Mishra and U U Lalit has included the indicting findings of the auditors' report which stated that Rhiti Sports received Rs 42.22 crores between 2009 and 2015 .

The auditors found that there was no resolution on record authorizing the Amrapali CMD to enter into an agreement on behalf of all Amrapali Group of Companies.

"It is observed that the Company Amrapali Sapphire Developers Private Limited has paid a sum of Rs. 6.52 Crores out of the total amount of Rs. 42.22 Crores paid from the Amrapali group of Companies to Rhiti Sports Management Private Limited during the years 2009 - 2015. This sum has been paid on account of Agreements executed by Shri Anil Kumar Sharma, CMD for and on behalf of Amrapali Group of Companies with Rhiti Sports Management Private Limited. There is no resolution on record authorizing Mr. Anil Kumar Sharma, CMD to enter into an agreement on behalf of all Amrapali group of Companies", said the report.

Then there was an agreement of March, 2015 by which Amrapali was given sponsorship rights of the IPL team Chennai Super Kings captained by Dhoni. Another agreement (between the Group and Rhiti Sports) of November, 2009 came to light, by virtue of which Dhoni was obligated to be present for the Chairman for three days. However, the forensic report averred that "There are no documents held on record for compliance of this condition".

As per the auditors, these agreements had been executed "on plain paper", and that "no Resolution was in favour of Arun Pandey, Signatory of Rhiti Sports Management Private Limited".

The report said that the agreements were "sham agreement" which have been made just for payment of amounts to Rhiti. The agreements do not stand the test of law and the amounts should be recovered from Rithi, recommended the report.

The relevant extract from the report is as follows:

"According to the Agreement for sponsorship dated 20th March, 2015,Amrapali Group of Companies got right to advertise as Logo Space at various places in the IPL 2015 for Chennai Super Kings. It is observed that this Agreement is on plain paper and executed only between Amrapali and Rhiti Sports Management Private Limited and there are no signatories on behalf of Chennai Super Kings to this Agreement. No Resolution in favour of Shri Arun Pandey, Signatory of Rhiti Sports Management Private Limited is attached with the said Agreement.

This clearly shows that these Agreements have just been made for payment of amounts to Rhiti Sports Management Private Limited Company are Sham Agreements and made just for making payments to Rhiti Sports Management Private Limited. We feel that Home Buyers money has been diverted illegally and wrongly to Rhiti Sports Management Private Limited and should be recovered from them as the said Agreement in our opinion do not stand the test of Law". 

In the ground-breaking judgment, the Apex Court listed 23 companies which were "created only to route the funds and transactions consisting of office boys, persons with no income and dummy companies in which family members and relatives were inducted as members only for few transactions...", of which Amrapali Mahi was one.

In context of the said company, Aggarwal and Bhatia also submitted, "We are informed verbally that this company was incorporated for development of a project in Ranchi. An MOU was also entered between the parties though we were not provided a copy of that." 

The SC accepted the report to form a prima facie finding of violation of Foreign Exchange Management Act.

"In view of the finding recorded by the Forensic Auditors and fraud unearthed, indicating prima facie violation of the FEMA and other fraudulent activities, money laundering, we direct Enforcement Directorate and concerned authorities to investigate and fix liability on persons responsible for such violation", ordered the Court.

The Court also directed various "Companies/ Directors and other incumbents in whose hands money of the home buyers is available as per the report of Forensic Auditors, to deposit the same in the Court within one month".

In April this year, MS Dhoni had moved the Supreme Court seeking protection of his ownership rights on an over 5,500-square ft penthouse he booked 10 year ago in a project of Amrapali Group.