Sushil P. Mantri, director of Mantri Developers Private Limited, a Bengaluru-based real estate entity, was arrested by the Enforcement Directorate (ED) in connection with the ongoing investigation under Prevention of Money Laundering Act (PMLA), 2002. The accused was produced before the court on Saturday and the ED has been granted 10 days custody.
It may be recalled that the ED had initiated an investigation into the money laundering case in March 2022 based on the FIR registered in Subramanyapura police station in Bengaluru in 2020.
The FIR had been filed against the company and its directors and many other employees. Many home buyers had filed complaint with the police and the ED alleging that accused entities/persons were involved in money laundering and lured prospective buyers with misleading brochures, falsification of delivery time lines and window dressing and collected more than Rs 1,000 crore as advance money from thousands of buyers. However, they were not given possession of the flats even after seven to 10 years.
During the investigation, the company was found to have offered various Ponzi like schemes calling them as "buy-back" plan and advance money had also been collected for the flats. In some cases, the company has not refunded the amount to buyers even after clear directions from the Real Estate Regulatory Authority (RERA).
Investigations by the ED also revealed that the amount so collected from the buyers for construction and completion of the projects had been diverted for personal use by the management of the company and for other fraudulent purposes, which led to the projects getting stalled.
Currently, the group has a total outstanding loans of Rs 5,000 crore taken from various financial institutions. Of this amount, around Rs 1,000 crore is overdue and some of the loan has been declared as non performing asset (NPA). The ED also stated that the company had cross collateralised its assets to different financial institutions for taking multiple loans on the same assets.
