Centre agrees to consider providing funds for Amrapali’s stalled projects

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NEW DELHI: In what could come as a relief to around 46,000 Amrapali home-buyers, the Centre on Friday told the Supreme Court that it is considering to step in to provide funds to complete the housing projects which could not be completed as funds were allegedly diverted by the Group and its directors.
After a bench of Justices Arun Mishra and U U Lalit said the Centre should provide funds for completion of Amrapali’s housing projects which have been taken over by NBCC, additional solicitor general Vikramajit Banerjee told the court that the issue is already under considerations of the finance ministry and he will seek instructions on how much money could be given for the stalled projects.
Facing a fund crunch with cautious buyers not paying their dues of Rs 3,600 crore and NBCC refusing to invest money, the SC had earlier asked the Centre to consider using its real estate stress fund, managed by SBI Capital, for construction of the stalled projects.
Senior advocate R Venkataramani, who was appointed as receiver to manage the affairs of Amrapali group, told the court that the finance ministry has set in motion the process of financing Amrapali projects and pleaded the court to direct SBI Capital to relax general parameters laid down by it and release the funds by end of June. He also informed the court that UCO Bank has agreed to deal with unsold units and proposed to fund those properties through a consortium of banks.
The court, however, refrained from passing order to the Centre and SBI Capital after the ASG assured the bench that he will seek instructions from the ministry and inform the court next week on the decision to be taken on the proposal.
The estimated cost for construction of all housing projects is Rs 8,500 crore and amount recoverable from home-buyers and buyers of commercial areas is Rs 3,700 crore, 43% of the cost. Though SC-appointed forensic auditors submitted that around Rs 11,000 crore is the recoverable amount which is enough to bear the cost of the construction, the fund is not available as the process of auctioning the Group’s assets is on. Also, those who benefited from diversion of home-buyers’ money are not returning the funds despite court orders.
As per the forensic auditors’ report, there are around 5,229 unsold flats in different Amrapali projects and at least Rs 1,958 crore could be raised by selling them. They said the Group sold 5,856 flats at low prices and Rs 321.3 crore can be recovered from these flat-buyers.

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