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ED arrests Avantha Group promoter for ₹467-cr fraud

By IndianMandarins- 05 Aug 2021
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New Delhi (05.08.2021): Gautam Thapar, promoter of the Avantha Group, has been arrested for an alleged diversion of bank funds, sham transactions with related parties, fabricating books of accounts, and siphoning off funds including various bank loan proceeds.

Thapar's arrest is the culmination of a case filed by the Enforcement Directorate against him for allegedly causing a loss to YES Bank of ₹467 crores.

The case was filed on a complaint by YES Bank, which had extended a loan of ₹515 crores to Avantha Realty for ten years in 2017. The loan was to be used for continuing operations of Avantha's Jhabua Power Limited, but Thapar alleged diverted it for other purposes.

The CBI is also investigating this case.

Records show that Avantha started defaulting on repayments and the loan given to it turned into a non-performing asset from 2019. According to an audit done by the bank, it was discovered that only about ₹15 crores were actually deployed in the power company and the end-use of the balance of ₹500 crores could not be ascertained.

It is alleged that the balance was used to settle the loans of the Avantha Group instead of using the fund for operating the power company.

Earlier, Thapar was also named in a real-estate case involving YES Bank founder Rana Kapoor. It was alleged that Thapar offered “illegal gratification in lieu of favors extended in connection with official work” by selling a bungalow in South Delhi to Kapoor in return for loans sanctioned to the Avantha Group.

Thapar is seen to have become a serial corporate offender. In 2019, CG Power ousted him as chairman after disclosures were made by the company that some employees had carried out unauthorized transactions, which led to a potential understatement of not only the liabilities but even advances to related and unrelated parties of the company and the group.

A forensic audit of CG Power found that various banks, auditors, and the company’s board were aware of the transactions, which are now being investigated for fraud and manipulation.

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