Sushil Pandurang Mantri, the chairman and managing director of Bengaluru-headquartered real estate company Mantri Developers Private Limited, has been arrested by the Enforcement Directorate (ED) in a money laundering case.
A court has remanded him in the ED's custody for 10 days.
On Friday, 59-year-old Sushil appeared for questioning before the ED in response to a notice but did not cooperate in the investigation, a source said. He also allegedly failed to provide documents required for the investigation. Accordingly, he was arrested and taken into custody, the source added.
In a statement, the central agency specified the grounds for the arrest.
According to the ED, it had launched an investigation after registering an Enforcement Case Information Report (ECIR) in March based on an FIR filed by homebuyers at Bengaluru's Subramanyapura police station in 2020 against the directors and other executives of the company.
The homebuyers alleged that the accused entities/persons were involved in money laundering and had induced them with "rosily-painted schemes, misleading brochures, falsification of delivery timelines and window-dressing". The company collected more than Rs 1,000 crore in advance from thousands of buyers seven to 10 years ago but failed to give possession of the flats, the ED stated.
The ED found out that the company offered various Ponzi-like schemes by naming them buyback plans and collected advance money for the flats/homes. While the money collected from buyers was meant to be spent on construction, it was diverted for personal use by the management or similar fraudulent purposes, stalling the projects, the ED stated.
In some cases, the company failed to refund the buyers even after clear directions were issued by the Real Estate Regulatory Authority (RERA), according to the ED.
Currently, the group has total outstanding loans of around Rs 5,000 crore from various financial institutions. Of this, around Rs 1,000 crore is overdue and some of the loans have been termed non-performing assets (NPAs).
The ED further stated that the company cross-collateralised its assets to different financial institutions in order to take multiple loans on the same assets.
In 2019, eight cases were registered against Sushil, his son and others by different homebuyers at the Cubbon Park police station, accusing them of cheating after taking money by promising flats/homes.
A Mantri Group executive refused to comment.
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