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EOW files case against Paramvir Developers for financial irregularities of Rs 78 crore
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EOW files case against Paramvir Developers for financial irregularities of Rs 78 crore
Publish on : 2024-02-26 09:47:34
This will be the first time since its formation that the regulatory body registered a complaint with the EOW based on a forensic audit of the project. The EOW has estimated the fraud amount to be Rs 78 crore. MUMBAI: The Economic Offences Wing (EOW) on Friday registered an offense against Paramvir Developers and its promoters, Kumar and Kanhyalal Mordani, for rampant financial irregularities in its Khar project based on a complaint filed by MahaRera. This will be the first time since its formation that the regulatory body registered a complaint with the EOW based on a forensic audit of the project. The EOW has estimated the fraud amount to be Rs 78 crore. Offenses have been registered under sections 406, 409, 420, and 34 of IPC — for breach of trust and cheating as well as under the MahaRera Act. As per the MahaRera complaint, the irregularities are centered on the Paramvir Developers’ High Street project, which is spread across a 6,525 sqft plot in Khar, and a complaint was filed only after running a forensic audit of the project. “From the audit report, it appears that there is prime facie evidence of misuse/diversion of funds of the allottees as well as funds borrowed from lenders. A forensic audit found financial and regulatory irregularities on nine counts. Maharera found that huge funds had been dealt with in a manner detrimental to the interest of allottees, and the promoter had violated the MahaRera Act. As per the provisions of the MahaRera Act, section 4, every promoter is required to open a separate Rera account in a scheduled bank to cover the cost of construction and land. In the case of Paramvir Developers, it was found that there was a blatant violation of the rule. The irregularities listed in the complaint include non-deposition of funds into a separate project bank account, loss resulting from the sale of land, non-submission of project progress reports, construction of unsanctioned floors, delay in project completion and non-submission of required information for forensic audit. During the forensic audit, auditors had multiple follow-up visits, sent emails, and held multiple rounds of discussion, requesting the data required for audit, but the information was not provided for review. The audit report found that Rs 13.7 crore was collected from allottees, of which Rs 2.3 crore was not deposited in a separate bank account, resulting in a violation of the MahaRera Act. Since funds were collected in accounts other than the designated account, there was a shortfall in the deposit of the total amount. It was found that there was a misuse of Rs 76 crore for making non-project-related payments. “There was large-scale diversion of funds. Illegal floors were constructed without the consent of two-thirds of the allottees. The project was to be completed on December 23, 2022, but only 31% of the work was completed till March 23, 2023,” a Maharera official said. As per the audit report, the promoter accepted more than 70% of the agreement value as payment from allottees, amounting to Rs 2.7 crore.

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