ED detains the director of a real estate group based in Bengaluru on suspicion of money laundering

The company has over 5,000 crore worth of outstanding loans from several financial institutions, of which about 1,000 crore are past due and some have been classified as NPA.

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Sushil P. Mantri, the director of Bengaluru-based real estate company Mantri Developers Pvt. Ltd., was reportedly detained on June 23 as part of a money laundering investigation involving the alleged deception of multiple homebuyers.

Mantri was brought before a Bengaluru PMLA court, which sentenced him to 10 days in ED prison after hearing his case, according to a statement.

After reviewing a Bengaluru police FIR filed against them in 2020, the ED filed a money laundering investigation against the group and its promoters in March.

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“Many homebuyers have filed complaint with the police as well as with the ED alleging that accused entities/persons are involved in money laundering and have induced the prospective buyers with rosily painted schemes, showing misleading brochures, falsification of delivery time lines and window dressing and collected more than 1,000 crore as advance money from thousands of buyers,” the ED alleged.

“However, they have not been given possession of their flats even after 7-10 years,” the ED added.

According to the ED allegations, the firm offered various “Ponzi-like schemes which was named as buy-back plan and advance money was collected for the flats/homes.”

Additionally, despite clear instructions from the Real Estate Regulatory Authority (RERA) in some situations, the firm has not returned the money to the buyers.

The project has stopped as a result of the ED investigation’s discovery that funds collected from customers by the company that were intended for project construction have been diverted for personal use by the management of the company or for other fraudulent purposes.

According to the information, the company has a total of approximately 5,000 crore in outstanding loans from different financial institutions, of which about 1,000 crore is past due and part of the loans have been classified as non-performing assets (NPA), the ED said.

“The company has cross-collateralised its assets to different financial institutions for taking multiple loans on same assets,” it said.