Bengaluru is rocked by a Rs 3,300 Crore housing scam, with banks and builders facing FIRs.

Ozone Urbana Infra Developers and a number of lenders have been charged by Bengaluru police with fraud totalling Rs 3,300 crore by homebuyers. Fraudulent loans and unfinished projects were used to embezzle the money.

Cyber News Dec 13, 2024 0 17 Add to Reading List

Bengaluru is rocked by a Rs 3,300 Crore housing scam, with banks and builders facing FIRs.

In connection with a number of banks and financial institutions, Ozone Urbana Infra Developers Private Limited has been charged by the Bengaluru police's Central Crime Branch (CCB) with cheating homeowners out of Rs 3,300 crore. Errol John Noronha, president of the Ozone Urbana Buyers Welfare Association, filed the complaint, accusing the developers of taking out loans in the names of buyers, embezzling money, and not finishing housing projects that were promised.

The developers allegedly used aggressive marketing tactics to entice the buyers, promising to pay the EMIs until the project was finished. The money was purportedly transferred to other organisations in spite of these assurances, which left financiers and purchasers in a difficult situation.

Several significant financial organisations, including Piramal Capital and Housing Finance, Indiabulls Housing Finance, Bank of Baroda, and Housing Development Finance Corporation (HDFC), are among the defendants. Charges have been brought under several sections of the Indian Penal Code, such as 120B (criminal conspiracy), 420 (cheating), 409 (breach of trust by a banker or agent), and 406 (criminal breach of trust). There has also been reference to the Karnataka Protection of Interest of Depositors in Financial Establishments Act.

Despite directives from the Karnataka Real Estate Regulatory Authority (K-RERA) to deposit 70% of the funds into an escrow account, the developers allegedly failed to comply. This non-compliance, coupled with repeated neglect of buyer grievances, exacerbated the financial losses faced by stakeholders.

The suspects include Ozone Urbana Managing Director Vasudevan Satyamoorthy, his wife Priya Vasudevan, and other key executives such as Satyamoorthy Sai Prasad and Durbhakula Vamsi Sai. Investigators are now working to trace the misappropriated funds and hold the accused accountable.