MUMBAI: The Enforcement Directorate (ED) which is probing the alleged Rs 22,000 crore Slum Rehabilitation Authority (SRA) scam case by the promoters of Omkar Realtors and Developers (Omkar), Kamal Gupta and Babulal Verma have now trained their focus on their association with the Piramal Group's real estate arm.

Omkar's promoters were charged under various sections of the Prevention of Money Laundering Act (PMLA) for misusing various permissions given under the SRA schemes and availing loans worth Rs 22,000 crore which were then diverted or siphoned, and also specifically in the case for diverting around Rs 450 crore taken by way of a loan from YES Bank. 

According to sources in the ED for over two months since Gupta, Verma and other promoters of Omkar were arrested they have been looking into the several partnerships that they had forged in dozens of SRA projects to scrutinize the financial dealings which may have been siphoned off or diverted to other projects. 

The ED is right now specifically probing a Rs 2,000 crore loan from the Piramal's Group to Omkar and have already recorded statements of Rajesh Laddha who is executive director and group chief financial officer of the flagship Piramal Enterprises. Although it is not clear which particular deal pertains to this amount of Rs 2,000 crore, media reports quoting industry sources (perhaps most probably from within the group) say that it was purely a business transaction and done through proper agreements. 

Sources in ED say that in the past few months they have been scrutinizing documents pertaining to several deals by the Omkar promoters which were specifically used to divert or siphon funds and the Rs 2,000 crore loan from the Piramal's Group to Omkar is just one of it. Although due to COVID-19 restrictions they are not able to speed up work, but as and when more information comes up pertaining to deals with Piramal's (or any other parties) they would summon more company officials for questioning. 

Almost immediately after Omkar's promoters were arrested, based on details of deals done by them the ED had arrested businessman Sachiin Joshi of Viking Group & JMJ group ( manufactures of Goa pan masala) for his alleged involvement in laundering Rs 100 crore in the business activities of Omkar. Joshi had allegedly helped Omkar for the layering of Rs 87 crore pertaining to an SRA scheme at Wadala in Central Mumbai for which Omkar had taken a Rs 410 crore loan from Yes Bank.

In December 2019 Piramal Realty, the real estate unit of Piramal Group, had entered into a joint development agreement with Omkar to develop a residential project in Mumbai’s Mahim area with a total investment of around Rs 3000 crore. The plan envisaged developing 2.2 million square feet over 4 acres in Mahim. By end of 2019, Piramal Realty's under development portfolio was around 17 mn sq ft of residential and commercial realty in and around Mumbai.

This was the second such partnership between the Piramal's and Omkar's, the first one being a luxury housing project at the Mahalaxmi Dhobighat, a neighbourhood in south Mumbai in mid-2019. 

However, apart from these projects, Piramal group firms have been associated with Omkar in the past also. For instance, in March of 2015 Piramal Fund Management, the real estate investment platform of Piramal Enterprises had invested Rs 1,200 crore in 'Omkar 1973' Worli, a luxury residential project of Omkar in the form of debt. Out of the Rs 1,200 crore included Rs 800 crore from the newly created construction finance arm. 

Of the total corpus, Rs 400 was to be used by the developer Omkar to pay debt and the rest (Rs 800) was to be used to fund construction. The construction funding has been given against 20:80 scheme of Omkar. 

Omkar's Varma had then said that the funding from Piramal's had helped them to retire their debt and achieve full financial closure for the completion of 'Omkar 1973' project. 

Piramal Fund Management at that time had entered the space usually occupied by banks which extended loans for construction purely based on the states of activity and not as a lumpsum disbursal and it made decent returns in the 'Omkar 1973' project monetising in phases as early in August 2015. Incidentally, Yes Bank had also extended a loan for the said project. 

The promoters of YES Bank including founder Rana Kapoor were arrested in March 2020 for defrauding the bank and is in judicial custody. In January 2021, ED Kapoor in another money laundering case related to Mackstar Group and PMC Bank. 

Recently the Piramal Group won the bid for the troubled housing finance company Dewan Housing Finance Corporation Ltd (DHFL) under the National Company Law Tribunal resolution plan. DHFL which owes Rs 87,000 crore to financial creditors, was an attractive target for Piramal's as it can help the group achieve its ambitions in retail lending.

As per what is known about the resolution plan, Piramal Group would pay a total of Rs 37,250 crore, including upfront cash of Rs 12,700 crore, Rs 4,000 crore of interest income on DHFL’s book and Rs 19,550 crore of non-convertible debentures to be repaid in 10 years. The estimated recovery for creditors according to the plan stands at 43 per cent.

DHFL's portfolio is indeed attractive. As per presentations given by the administrator appointed by NCLT, it consists of Rs. 40,000 crore wholesale and SRA portfolio which includes, construction finance in Tier 1 cities, loans to corporates, loans against very large land parcels and SRA projects located in most creamy areas in Mumbai like Juhu & Irla.

Ironically, Adani Group which was also in the fray had reportedly bid for DHFL's Rs 40,000 crore wholesale and SRA portfolio, valuing it at Rs 3,000 crore.