Former Jaypee Infratech Chairman Manoj Gaur Arrested Over Alleged Diversion of Homebuyer Funds

India’s financial crime enforcement authority announced on Thursday that it has taken into custody Manoj Gaur, the former chairman of Jaypee Infratech, over allegations that he diverted funds collected from thousands of home buyers. The company, once a prominent name in India’s real estate and infrastructure sectors, had been responsible for major housing developments in Noida as well as construction of the Yamuna Expressway, the 165-kilometre (100-mile) roadway that links Noida with Agra. Those residential projects have since been transferred to Suraksha Group.

The Enforcement Directorate (ED) initiated its probe into Jaypee Infratech and its senior officials after several police complaints were lodged by home buyers in Delhi and nearby Uttar Pradesh, accusing the company of cheating and criminal breach of trust. Requests for comment sent to Jaypee Infratech went unanswered, and efforts to reach Manoj Gaur were unsuccessful.

Jaypee Infratech, a subsidiary of the Jaypee Group and once counted among India’s most influential conglomerates, saw its debt burden rise sharply after 2010. The financial crisis that followed ultimately pushed the company into bankruptcy and prompted the government to amend insolvency laws so as to extend greater protections to homebuyers caught in long-delayed or abandoned developments.

According to the ED, its investigation has revealed that 146 billion rupees ($1.66 billion) raised from home buyers was misused for purposes unrelated to construction and was “siphoned off to related group entities and trusts.” The agency said in its statement that “The investigation has established the central role of Manoj Gaur in the planning and execution of the fund diversion.”

In May, ED officials conducted searches at 15 sites, including corporate offices and other premises linked to Jaypee Infratech, and seized both physical documents and digital materials pertinent to the case. The agency noted that further investigation remains in progress.

By fLEXI tEAM