ED Arrests Jaypee Group's Manoj Gaur in Major Money Laundering Case

The Enforcement Directorate (ED) has made a significant move by arresting Manoj Gaur, the Managing Director of Jaypee Infratech Limited, in a major money laundering case. According to sources, the arrest is linked to the alleged siphoning of funds paid by homebuyers for the construction of flats.

The ED had previously conducted searches at 15 premises connected to Manoj Gaur's flagship real estate development companies, including Jaypee Infratech Ltd. and Jayprakash Associates Ltd., as well as their associated entities. These searches were carried out in May and spanned across Delhi, Mumbai, Noida, and Ghaziabad. During the operation, officials seized hard cash amounting to Rs 1.7 crore, along with financial records, digital data, and property documents registered in the names of promoters, their family members, and group companies.

The raids were conducted as part of an ongoing investigation under the Prevention of Money Laundering Act (PMLA). The case gained national attention after IDBI Bank filed a petition against Jaypee Infratech Limited (JIL) in the National Company Law Tribunal (NCLT), Allahabad, following JIL's default on a payment of over Rs 526 crore. The NCLT initiated the insolvency process on August 9, 2017.

The insolvency case involved over 21,000 homebuyers who had booked flats in JIL projects, particularly in Wish Town, Noida. These homebuyers were left in the lurch as funds were allegedly diverted from construction projects. The Supreme Court intervened to protect the interests of the homebuyers, leading to an amendment to the Insolvency and Bankruptcy Code (IBC) that classified homebuyers as financial creditors, giving them a vote in the resolution process.

The case involved extensive legal proceedings, including disputes over transactions where JIL's assets were mortgaged to secure the debts of its parent company, Jaiprakash Associates Limited (JAL). After several rounds of bidding, the National Company Law Appellate Tribunal (NCLAT) approved a resolution plan submitted by the Suraksha Group in May 2024. Under this plan, Suraksha is to complete the unfinished projects and pay enhanced compensation to farmers as part of the land acquisition terms.

This arrest and the ongoing investigation highlight the serious nature of the allegations and the commitment of the Enforcement Directorate to bring those involved in financial misconduct to justice. The case has significant implications for the real estate sector and underscores the importance of transparency and accountability in financial transactions.