Why former Jaypee Infratech MD was arrested in money laundering case

Manoj Gaur, who was accused of cheating multiple home buyers, was arrested under the Prevention of Money Laundering Act

Manoj Gaur, former chairman and managing director of Jaypee Infratech Ltd (JIL), was arrested by the Enforcement Directorate (ED) on Thursday in a money laundering case, according to news agency ANI.

Why was Manoj Gaur arrested?

Gaur, who is accused of cheating multiple home buyers, was arrested under the Prevention of Money Laundering Act (PMLA).

 

The ED took this action after finding evidence that money collected from homebuyers for Jaypee’s housing projects was illegally diverted to other companies and trusts instead of being used to build homes.

What is the case about?

The case began after thousands of homebuyers of Jaypee Wishtown and Jaypee Greens projects filed complaints with the Economic Offences Wings (EOW) in Delhi and Uttar Pradesh. They said that even though they paid large amounts for homes, the projects were left incomplete, and their money seemed to have disappeared.

 

 

According to a report by The Indian Express, hundreds of Jaypee’s Wish Town project homebuyers protested outside Jaypee School in Noida’s Sector 128 in April this year, citing long delays in the delivery of their homes.

 

At the time, the homebuyers had sought renewal of the stalled construction work, which remained on hold even after the National Company Law Tribunal (NCLT) approved the resolution plan in March 2023. Suraksha Realty took over the debt-ridden JIL in May last year.

What did the ED find?

Following the protests, the ED conducted raids in Delhi, Noida, Ghaziabad, and Mumbai earlier this year. They seized financial and digital records and documents that showed how the money was moved around through a complex web of transactions to hide the diversion. It was discovered that Gaur played a “central role” in planning and executing the movement of funds.

 

According to ANI, the ED’s investigation found that about ₹14,599 crore collected from buyers by Jaiprakash Associates Ltd (JAL) and JIL was not fully used for construction. Instead, a big part of the money was diverted to other Jaypee Group companies such as:

• Jaypee Sewa Sansthan
• Jaypee Healthcare
• Jaypee Sports International

 

The ED also said that Gaur was the Managing Trustee of Jaypee Sewa Sansthan, which received some of the diverted money.

What next?

After his arrest, Gaur will be produced in the court, where the ED will likely seek custody to question him further. Meanwhile, the ED will continue investigating to trace where the money went and whether more people or companies were involved in the alleged scam.