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The Directorate of Enforcement (ED), the central agency responsible for investigating economic crimes in India, has officially initiated an inquiry into the activities of real estate developer Ansal API. This probe announced last week is primarily focused on the firm's Gurgaon project and follows allegations of financial irregularities in the company's Lucknow township project.
The ED's investigation is grounded on potential violations of the Prevention of Money Laundering Act (PMLA). The agency embarked on this course of action following a series of complaints connected to Ansal API's Lucknow township project. In 2019, the real estate regulator of Uttar Pradesh accused Ansal API of the misappropriation of INR 7600 crore related to the same project, a charge supported by an independent forensic audit.
According to sources, the ED had previously requested information pertaining to the case from the Uttar Pradesh Real Estate Regulatory Authority and the Lucknow police. Pranav Ansal, the promoter of Ansal API, confirmed that ED officials have visited the offices of several real estate developers, including M3M, IREO, and KRISH, for what he described as routine queries.
Pranav Ansal has denied any wrongdoing, stating that the current investigation does not involve any economic offences. He reassured stakeholders that their Gurgaon project is thriving with over 1,000 residents and that all questions posed by the ED have been fully addressed.
Meanwhile, the ED has been active in other high-profile cases. The agency has seized assets worth INR 71,300 crore in a separate money laundering case against the IREO group. The M3M group also finds itself under ED's scrutiny, while the Krrish Group was subjected to a raid in relation to a Central Bureau of Investigation probe, as reported in 2019.
Ansal API has been embroiled in financial troubles, with the company admitted for insolvency proceedings in November 2022. The National Company Law Tribunal appointed Ashwani Kumar Singla, a former State Bank of Patiala official, as the resolution professional to oversee the company's restructuring.
In conclusion the ED's probe into Ansal API marks yet another high-profile investigation into India's real estate sector, highlighting the government's increasing efforts to tackle economic crimes. The outcome of this investigation could have significant implications for the industry and for investors, both domestic and international. As the probe unfolds, all eyes will be on the ED's findings and any subsequent legal actions.
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