Krrish Realtech, a Gurugram-based realty group, and its promoter Amit Katyal are under investigation by the Enforcement Directorate (ED) for collecting over ₹500 crore from home buyers for housing plots, but then allegedly diverting around ₹205 crore of the money to a hotel project in Sri Lanka.

The ED has in its chargesheet said it is investigating complaints from a number of homebuyers across the country, many of them registered in the Delhi NCR region, under the anti-money laundering law.

Notably, Katyal was arrested by the ED in 2023 in a separate money laundering case related to the railways alleged land-for-jobs scam involving RJD chief Lalu Prasad, his wife Rabri Devi and other family members.

What has the ED said?

The Gurugram zonal office of the ED filed a chargesheet against the group and its promoters in July and the local special Prevention of Money Laundering Act (PMLA) court issued a notice to the accused on August 19.

“ED investigation has found cheating and fraudulent activities of the accused Amit Katyal by luring innocent plot buyers into booking plots against their projects. His group company collected more than ₹500 crore from over 400 customers without even possessing valid license(s) required under the law,” the ED said in a statement.

The “proceeds of crime” generated from this alleged fraud were “immediately diverted” to the personal accounts of Katyal and other “shell” (paper) companies beneficially owned by him and his family members, it claimed.

The accused appointed “dummy” directors in such shell companies and they held various immovable properties.

It was found that an amount of ₹205 crore, which was collected from the homebuyers, was “diverted” for a real estate-cum-hotel project in Sri Lanka’s capital city of Colombo through a shell company named Mahadev Infrastructure, the ED alleged.

Some other part of these funds, according to the ED, were also utilised for purchase of properties, land and flats in the name of some alleged “front” companies like Good Earth Pvt. Ltd., The One Transworks Square Pvt. Ltd. (a Sri Lanka-based company), Heaven Tradelink Pvt. Ltd. and the family members of the promoters and their employees.

Probe also found that Katyal’s son, who has taken the citizenship of Saint Kitts and Nevis, is claiming “beneficial ownership” of the assets located in Sri Lanka.

ED investigating fraud complaints

The money laundering case of the ED stems from the FIRS of Delhi Police and Gurugram Police Economic Offences Wing (EOW).

The agency conducted searches in this case last year and also attached assets that includes the realty project in Sri Lanka and lands in Sector 63 , 65 and 70 of Gurugram apart from some immovable properties in Delhi.

Describing the alleged modus operandi used by the promoters to perpetrate this alleged realty fraud, the ED said Katyal never intended to hand over the plots to the “gullible” buyers that were promised to be built on a 70 acre land in Gurugram, valued at ₹2,000 crore as per current market rates.

Instead, it said, several attempts were made to “alienate” the “undeveloped” land from genuine plot buyers by allotting them to multiple investors, creating “fictitious” creditors to file a “prepackaged” insolvency petition before the NCLT and intentional “misrepresentation” of plot buyers list before the Supreme Court appointed referee among other attempts, the agency said.

The ED said the plot buyers “objected” to this application of the company before the NCLT and subsequently the application was withdrawn by the promoters.

The agency said its probe found that the list of plot buyers submitted before the Justice Gita Mittal committee (appointed by the Supreme Court to address the claim and counter-claims of the plot buyers) were “falsified” to the promoter’s advantage.

“Some of the plot buyers’ names were additionally identified by the ED who were not part of the list submitted before the Committee,” it said, flagging the “fraudulent” acts of the promoters.