Mumbai: City police’s Economic Offences Wing (EOW) has registered a case against financial services group Edelweiss and its 15 associate companies for allegedly conspiring and defrauding investors of Rs 750 crore. The case was filed by Ecstasy Realty Pvt Ltd at Amboli police station last month based on a complaint alleging collusion and misappropriation of funds, among other charges. The EOW has taken over the probe in the case.
Edelweiss, in a detailed statement to TOI, alleged that the dispute is a civil matter and Ecstasy has already filed a commercial suit.
According to the FIR, the alleged fraud took place between March 26, 2018, and June 26, 2022. It centres around the Raisakaran project in Andheri (West), where Ecstasy Realty secured a Rs 1,350 crore loan from Edelweiss Group. However, only Rs 600 crore was reportedly disbursed, leaving Rs 750 crore allegedly misappropriated through “evergreening”—a practice of renewing loans to mask defaults.
Additionally, the complaint accuses Edelweiss of selling mortgaged flats at prices significantly lower than the market value. Properties valued at Rs 12-13 crore were allegedly sold for Rs 7-9 crore. Flats in the Parthenon project—specifically flat numbers 602 and 702—were allegedly sold below the recalculated rate.
The complaint also alleged that during an 18-month moratorium period, without the consent of Ecstasy Realty, Edelweiss increased the interest rate from 15% to 16.25%, allegedly siphoning off Rs 61.68 crore through related group companies.
An Edelweiss statement said: “The FIR contains vague, non-specific allegations without specific instances of criminal wrongdoing. ERPL’s complaint appears to be retaliation for failing to secure relief in civil courts. It is nothing but a pressure tactic to avoid financial liabilities and prolong litigation. Instead of repaying dues, ERPL has used legal tactics to delay payments and deflect attention from its defaults. The principal dues under the Non-Convertible Debentures to Edelweiss are Rs 480 crores plus interest and other charges from April 2022. Recovery actions include a pending DRT (debt recovery tribunal) suit, cheque bouncing cases, a preliminary enquiry by Economic Offences Wing, and insolvency proceedings in National Company Law Appellate Tribunal. The FIR provides no clear basis for these allegations.”