Seven offices of real estate developers, IREO Group, linked to BJP leader Sudhanshu Mittal through his brother-in-law, and M3M Group in Gurugram and Delhi have been raided by the Directorate of Enforcement (ED) for siphoning off funds received from investors through shell companies.

An official spokesperson of the ED said these raids were conducted on 1 June under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). The raids took place a day after The Statesman had reported that action was likely to probe the money laundering angle of a corruption case filed against ex-CBI judge Sudhir Parmar.

During the search operation, 17 high-end luxury vehicles including a Ferrari, a Lamborghini, a Land Rover, a Rolls Royce, a Bentley and a Mercedes Maybach cumulatively worth about Rs 60 crore, jewellery bullion worth Rs 5.75 crore, cash of Rs 15 lakh and various incriminating documents, digital evidence and books of accounts were seized.

The ED has been investigating IREO Group for diverting funds of investors. The investigations were initiated on the basis of multiple first information reports (FIRs) registered against the group, which has also featured in an investigation by the Haryana Anti-Corruption Bureau. The FIR in the anti-corruption case had named Mittal, a close associate of late BJP leader Pramod Mahajan, and a person said to have links with judges, politicians and senior officials.

The investigations done by ED showed that huge amounts of money running into hundreds of crores were siphoned off through the M3M group also, and that the two companies had acted in concert.

In one of the transactions, M3M group received about Rs 400 crore from IREO Group through several shell companies in multiple layers, the ED said. The transactions were shown in the books of IREO as payments towards development rights. The land was owned by M3M group and its market value was around Rs four crore. M3M Group initially sold the development rights of the land to five shell companies for a payment of Rs 10 crore.

“It was claimed that the five companies are unrelated companies. Investigations show that the five shell companies were operated by M3M Group. The five shell companies thereafter immediately sold the development rights of the same land to IREO Group for about Rs 400 Crore. After receiving the amount of Rs 400 Crore from IREO Group, the five shell companies transferred the said amounts immediately to M3M Group through multiple shell companies and layers,” the ED said.

“All the shell companies were owned and operated by M3M Group under the directions of its promoters Basant Bansal and Roop Kumar Bansal and his family members. In this way, IREO and M3M siphoned off about Rs 400 Crore money belonging to investors and the proceeds of crime remained with M3M Group, which was used by M3M for other investments and paying off liabilities. On the other hand, IREO Group did not make any efforts to develop the land and started to write off the investments every year,” it said.

During the course of search action under section 17 of PMLA, 2002, the owners of the M3M Group, namely Basant Bansal, Roop Kumar Bansal, Pankaj Bansal and other key persons deliberately avoided investigations, the ED said.

IREO and M3M had flourished during the tenure of the former Haryana Chief Minister Mr Bhupinder Hooda. IREO is accused of defrauding several hundred home buyers, and of diverting funds overseas.