Mozambique has accused the Noida-based Amrapali Group construction firm of defrauding it of $13.92 million (Rs 97 crore), by presenting two guarantees from an Italian bank that did not exist, The Indian Express reported on Tuesday. Subsequently, the country has terminated a contract it signed three years ago with the Amrapali Group.
The Indian government had in 2013 extended a line of credit worth $47 million (Rs 327 crore) to Mozambique, for construction of 1,200 houses there – 400 each in the provinces of Zambezia, Tete and Cabo Delgado, The Indian Express reported. Citing documents it has accessed, the newspaper said Ultra Home Constructions (P) Ltd, a company promoted by the Amrapali Group, signed an agreement with Mozambique firm Fundo Para O Fomento De Habitacao in 2015 to build 400 houses in Tete.
However, work on the project did not begin as scheduled, despite several reminders from the Mozambique firm. When this continued for over a year, Fundo Para O Fomento De Habitacao decided to encash the guarantees given by Ultra Home, only to discover that the Italian bank, International Trade Bank Ltd, did not even exist, the report added. Subsequently, in a letter dated March 6, 2017, the Mozambique firm reportedly accused Ultra Home of fraud and decided to terminate the contract.
Exim Bank, which had extended the line of credit, also made inquiries about the Italian bank, but could find no evidence of its existence.
India’s National Company Law Tribunal has begun insolvency proceedings against the Amrapali Group. The Supreme Court is hearing a batch of petitions filed by more than 55 flat buyers in its Greater Noida project. The petitioners have claimed that more than 100 people had booked homes in the Amrapali Centurion Park-Low Rise project, Amrapali Centurion Park-Terrace Homes and Amrapali Centurion Park-Tropical Garden in Greater Noida between 2012 and 2014. They have said they did not get possession of flats nor did they receive a refund of the money they had invested.
On August 1, the Supreme Court ordered the attachment of all bank accounts and movable properties of 40 companies owned by the Amrapali Group. On August 8, the top court warned the group that “each and every property” of managing directors and directors of the firm would be sold to recover the cost of construction of its pending projects.