ED Arrests Noida Realty Company Promoter in Home Buyers’ Fraud Case

ED Arrests Noida Realty Firm Promoter in Home Buyers’ Scam Case

New Delhi – The Enforcement Directorate (ED) on Friday said it has arrested Anil Mithas, the key promoter of a Noida-based realty firm, under the anti-money laundering law provisions. The arrest comes after charges of misappropriation and diversion of ₹107 crore of home buyers’ money were made against the Unnati Group.

Mithas was arrested on April 16 and has since been remanded to ED custody till April 24 by a special court of the Prevention of Money Laundering Act at Ghaziabad, Uttar Pradesh, as per an agency statement.

The case stems from FIRs filed by a Special Investigation Team constituted by the Uttar Pradesh government, which charged Unnati Fortune Holdings Limited and its promoters with “cheating and fraud” relating to the large amount of ₹107 crore.

The ED probe found that between 2012 and 2019, Unnati Fortune Holdings Limited and IVRCL Infrastructure and Projects Limited had received ₹522.9 crore from home buyers for a residential project by the name of ARANYA in Sector 119 of Noida. However, instead of applying the entire amount to construct the project, the promoters purportedly invested “some part” of it towards that end while channeling the remainder in the guise of “phony loans and advances,” as well as a number of other fiscal misdeals relating to share premiums and material advance payments.

This diversion of funds has been said to cause considerable delays in the completion of the Noida project, putting many home buyers in vulnerable financial positions. A report by an audit, carried out under the umbrella of the Uttar Pradesh Real Estate Regulatory Authority, showed a stark “diversion” of funds worth ₹107 crore.

Subsequent investigations showed that certain properties were “fraudulently” sold to several buyers, worsening the plight of those who had invested their savings in the project.

The ED condemned the promoters, saying, “They did not fulfill their commitments to the buyers and betrayed trust and inflicted financial loss on several families. Hundreds of house buyers were left stranded while massive amounts of money were diverted by the promoters.” The agency stated that the money generated from such illegal activities are treated as proceeds of crime under the act.

The case points to persistent issues in the real estate industry, especially in terms of transparency and safeguards for home buyers’ interests. As investigations unfold, further legal consequences could be in store for those involved in the alleged scam.