Fraud, diversion of funds: Real estate giant Ansal API under the scanner in UP


Lucknow: Real estate giant Ansal API, entrusted with around 90 projects in Uttar Pradesh, now finds itself under the scanner for alleged fraud, criminal breach of trust and diversion of funds. 

The latest blow came last week when a Lucknow court issued a non-bailable warrant (NBW) against the firm’s top management, including chairman Sushil Ansal and his son Pranav Ansal.

“Two directors of the firm — Arun Mishra and Harish Gulla — have been arrested following the court’s NBW in the matter,” said Avineshwar Chandra Srivastava, Gomti Nagar Circle Officer (Deputy Superintendent of Police) in Lucknow. “The NBW was issued against five persons. The remaining three are still absconding.”

The company’s website, however, identifies Gulla as senior vice president of business development.

The court order pertains to a case of fraud filed against the firm by a home buyer in Vibhuti Khand suburb of Lucknow. The complainant had alleged that despite paying Rs 15 lakh to the group in 2011, he had not been given the 1800 square feet plot that the realtor had promised, police said.

Despite repeated attempts, the group could not be reached for comment. This copy will be updated when they offer a comment.

Resignation of Ansal CEO and fraud

The weeks that preceded these arrests not only witnessed a surge in complaints against the realtor but also the resignation of a top management head within the firm. 

Citing health reasons and family compulsions, Ansal group’s chief executive officer and joint managing director, Anil Kumar, resigned from his posts in April this year — it was at a time when the firm was being investigated by the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) after allegations of fraud and diversion of funds came to the authority’s notice.

Moreover, around three months ago, yet another complaint of fraud against the Ansal group reached the UP police. The complainant this time was another big business — a Kanpur-based tanner group, Super Tannery, which alleged that it had been duped of nearly Rs 5 crore. 

“More than five years ago, the Ansal group had an agreement with the Super Tannery group over the Taj City project in Agra and nearly Rs 5 crore had been given to them. When so many years went by without any receipt of the promised plot, the Super Tannery group approached them but their calls and requests went unanswered,” a senior UP police officer said. “The group then approached the police more than a month ago and filed a case of cheating and criminal breach of trust against the top leadership of the company.” 

The officer further maintained that the UP police administration was in the process of collating all the police cases against the group registered across the state to take further action.

Fungible use of Rs 606 crore: UP RERA

Alarm bells in the UP government corridors rang last year when UP RERA received around 400 complaints against the group for non-delivery of their properties and its failure in refunding their money. Following this, a Delhi-based firm Currie and Brown had been roped in to conduct a forensic audit.

UP RERA Chairman Rajive Kumar told The Print that the firm allegedly diverted around Rs 606 crore from various projects out of a total investment of around Rs 2,400 crore. Around 90 projects of the realtor group in UP includes “either plotted developments or flats”.

“Some of these projects are complete but quite a few of them are still incomplete. We had issued notices to the Ansal group, asking them to tell us their plan of action to complete these projects,” he said. “In the preliminary audit, it was shown that some amount of money which was received against these projects was actually used elsewhere by the group.”

Among the 90-odd projects of the Ansal API group is the Sushant Golf City Hi-Tech Township project spread across 6,000 acres on the Lucknow-Sultanpur Highway, a 300-acre township on the Delhi-Dehradun Bypass in Meerut, another township project called Sushant Taj City in Agra (details about projects, township) and high rise group housing projects in Ghaziabad and Greater Noida.

Responding to preliminary audit conducted by RERA, the Ansal group had told the real estate regulator that the diverted money was either used to repay loans or to repay buyers who wanted a refund. “They also claimed that the money was used for some other projects within the township,” Kumar said. “There are various heads under which this money has supposedly been used. Unless the detailed reply comes, it will be difficult to conclude what it was used for.” 

RERA officials maintain that they are awaiting a reply from the group on the notices issued to them. “The diverted money needs to be explained and also on how they are going to put money back into the projects and complete them in a time-bound fashion,” Kuar said. “I am told that they are in the process of filing a reply that should be with us in the next few days. The authority will then take a call both on the notices and their reply.”