INSUBCONTINENT EXCLUSIVE:
JP Morgan invested around Rs 85 crore ($12.3 million) in an Amrapali Group company's shares.A JPMorgan Chase - Co
unit violated country's foreign investment rules and helped property developer Amrapali Group divert funds from realty projects, the
Supreme Court said in a ruling and ordered an investigation.The court on Tuesday ordered the central anti-money laundering agency to
investigate Amrapali, based in Noida, for diverting funds overseas with the help of JPMorgan and others
The violations, based on a forensic audit, range from disregarding foreign investment norms, paying dividend without generating profits,
setting up fake companies and overvaluing shares.JPMorgan's Singapore-based spokesman Chris Cockerill declined to comment
The biggest US bank is allowed to seek a review of the ruling
Any criminal charges will only be filed in a lower court once investigation is complete.Developers, including Amrapali, Jaypee Infratech and
Unitech, have been taken to courts by irate homeowners and creditors as apartment sales slumped in the once red-hot South Asian market
following the triple whammy of a surprise cash ban, tax reforms and a consumer-protection law for the sector
crore, according to the ruling published on the top court's website."The shares were overvalued for making payment to JPMorgan," the
court's two-judge bench headed by Justice Arun Mishra said in its ruling, agreeing with the forensic auditor regarding JPMorgan's role
"It was adopted as a device for siphoning off the money of the home buyers to foreign countries."The ruling can impact lenders' efforts to
recover dues as the court held that home buyers have the first right over the projects rather than banks that have lent funds to the
incomplete projects.The investigations will be done under the court's supervision by police and the federal anti-money laundering
agency."We are not a country in which courts will permit such action and permit a person to go scot-free," according to the ruling.The case
is Writ Petition (Civil) No
940/2017, Bikram Chatterji and others v
Union of India and others in Supreme Court of India.Get Breaking news, live coverage, and Latest News from India and around the world on
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