News

The Enforcement Directorate (ED) on Thursday arrested Manoj Gaur, former Executive Chairman and CEO of Jaiprakash Associates and former Chairman and Managing Director of Jaypee Infratech, in a money laundering case linked to the real estate group, according to sources. The Patiala House Court granted the central financial crime-fighting agency the custody of Gaur for five days, said the sources. The agency had produced him in the court in the afternoon after its Delhi Zonal Office arrested him under the Prevention of Money Laundering Act (PMLA).

The ED arrested Gaur after conducting a detailed probe and analysis of evidence gathered during its ongoing probe in an Enforcement Case Information Report (ECIR). The agency questioned Gaur several times before taking him into custody.

Its investigation had established Gaur's central role in the planning and execution of the fund diversion through a complex web of transactions within the Jaypee group and its associated entities. It also revealed that out of approximately Rs 14,599 crore collected by JAL and JIL from homebuyers, as per claims admitted by the NCLT, substantial amounts of money were diverted for non-construction purposes and siphoned off to related group entities and trusts, including Jaypee Sewa Sansthan (JSS), Jaypee Healthcare and Jaypee Sports International.

It has also been revealed during the investigation that Manoj Gaur is the Managing Trustee of Jaypee Sewa Sansthan (JSS), which received part of the diverted funds.

The ED has already said that the probe revealed large-scale financial irregularities that could impact thousands of homebuyers.

The ED traced the money trail after several potential buyers complained that their funds were diverted to other companies or projects.

As per the complaints, senior Jaypee Infratech officials had allegedly collected large amounts of money from the public for several projects but then failed to complete them on time. The complaints -- filed by homebuyers of the Jaypee Wishtown and Jaypee Greens projects -- also alleged criminal conspiracy, cheating and criminal breach of trust against the company and its promoters.

According to investigators, some of the funds collected by the company were diverted irregularly.

The ED also suspects that the money -- meant for project construction -- was routed through shell companies, laundered to appear legitimate, and then spent improperly. The funds collected from homebuyers and investors were misused and diverted, according to officials.

In May, the agency conducted a major operation as part of its investigation into the alleged fraud, estimated to be worth Rs 12,000 crore. Those raids, targeting Jaypee Infratech and Jaypee Associates among several major real estate groups, spanned 15 locations across the National Capital Region and Mumbai.

Offices as well as properties linked to the entities were part of the investigation.