Jaypee case: Homebuyers seek banks’ support in forensic audit of firm

Customers who bought homes from Jaypee Infratech (JIL) are demanding support of banks for an independent forensic audit of the financials of the real estate company. It should be noted that Jaypee is currently undergoing its second round of corporate insolvency resolution process.
However, in a recent meeting of committee of creditors, this demand was blocked by the banks.
“Such resistance from the banks creates apprehensions against the bona fide of banks itself. It is apparent that the banks wishes to safeguard themselves and hence are resisting the demands of the home buyers for a forensic audit,” said the homebuyers in a media release.

The buyers have sought the assenting votes of IDBI Bank, India Infrastructure Finance, Life Insurance Corporation of India, State Bank of India, Corporation Bank, Syndicate Bank, Bank of Maharashtra, ICICI Bank, Union Bank of India, IFCI, Jammu & Kashmir Bank, Axis Bank and SREI Equipment Finance.
Earlier in December, the National Company Law Tribunal (NCLT), Allahabad, in its order of December 10, 2018, said there is no need to protect the privacy of individual investors in Jaypee Infratech’s housing projects after the resolution professional appealed for secrecy of the investors, particularly when they hold special post. It would rather improve transparency and voting rights of the investors, the court said.
Even if the investor in the Noida housing project is a Member of Legislative Assembly (MLA), Member of Parliament (MP) or judge or other government servant, their identity will be displayed on the company’s website.
“The details of immovable properties owned and possessed by government employees and persons holding the constitutional posts are available in the public domain or in election affidavits,” the court said.

Of the 24,000 homebuyers only 9,500 are part of the Committee of Creditors (CoC), taking part in the voting process, while remaining investors have not exercised right to vote and have chosen to abstain from voting.