Bengaluru Developers Ozone Urbana Face Allegations of Rs 33 bn Fraud

16 Dec 2024 CW Team

Industry sources revealed that this case represents an unprecedented scale of fraud in Bengaluru’s real estate sector. The investigative agencies are reportedly working to trace the misappropriated funds and uncover the full extent of the conspiracy.

The complaint was lodged by Errol John Noronha, president of the Ozone Urbana Buyers Welfare Association, who alleged that the developers secured loans in the names of homebuyers, misused funds, and failed to deliver housing projects as promised.

As per the FIR, the developers obtained Rs 15 billion in mortgage loans and misappropriated an additional Rs 18 billion from payments made by homebuyers and related transactions. These funds were meant for the Ozone Urbana township project in Devanahalli, one of the largest township ventures launched in 2012. Over a decade later, the project remains only 49 per cent complete, far from its original 2017 deadline.

Buyers stated that they were shown attractive brochures and assured that their EMIs would be covered until the project was completed. However, instead of receiving their promised homes, they are now burdened with unfinished properties and increasing debts.

The FIR implicates several prominent financial institutions, including HDFC, Indiabulls Housing Finance, Bank of Baroda, and Piramal Capital and Housing Finance, accusing them of being complicit in the alleged fraud. The charges against the accused include criminal breach of trust, cheating, criminal conspiracy, and violations of the Karnataka Protection of Interest of Depositors in Financial Establishments Act.

Despite Karnataka RERA regulations mandating that 70 per cent of funds be held in an escrow account, the developers are accused of flouting these rules, allegedly demonstrating no intention to fulfill their commitments.

The suspects named in the FIR include Managing Director Vasudevan Satyamoorthy, his wife Priya Vasudevan, and key executives Satyamoorthy Sai Prasad and Durbhakula Vamsi Sai. Investigators are actively tracking the diverted funds and preparing to initiate legal proceedings.

The developers and their associates are suspected of funnelling the misappropriated funds to other entities, leaving both buyers and financiers at a significant loss. Authorities are reportedly widening the investigation to identify all individuals and entities involved in the scheme.

The Central Crime Branch (CCB) of Bengaluru police has filed a case against Ozone Urbana Infra Developers, along with several banks and financial institutions, for allegedly defrauding homebuyers of approximately Rs 33 billion. Industry sources revealed that this case represents an unprecedented scale of fraud in Bengaluru’s real estate sector. The investigative agencies are reportedly working to trace the misappropriated funds and uncover the full extent of the conspiracy. The complaint was lodged by Errol John Noronha, president of the Ozone Urbana Buyers Welfare Association, who alleged that the developers secured loans in the names of homebuyers, misused funds, and failed to deliver housing projects as promised. As per the FIR, the developers obtained Rs 15 billion in mortgage loans and misappropriated an additional Rs 18 billion from payments made by homebuyers and related transactions. These funds were meant for the Ozone Urbana township project in Devanahalli, one of the largest township ventures launched in 2012. Over a decade later, the project remains only 49 per cent complete, far from its original 2017 deadline. Buyers stated that they were shown attractive brochures and assured that their EMIs would be covered until the project was completed. However, instead of receiving their promised homes, they are now burdened with unfinished properties and increasing debts. The FIR implicates several prominent financial institutions, including HDFC, Indiabulls Housing Finance, Bank of Baroda, and Piramal Capital and Housing Finance, accusing them of being complicit in the alleged fraud. The charges against the accused include criminal breach of trust, cheating, criminal conspiracy, and violations of the Karnataka Protection of Interest of Depositors in Financial Establishments Act. Despite Karnataka RERA regulations mandating that 70 per cent of funds be held in an escrow account, the developers are accused of flouting these rules, allegedly demonstrating no intention to fulfill their commitments. The suspects named in the FIR include Managing Director Vasudevan Satyamoorthy, his wife Priya Vasudevan, and key executives Satyamoorthy Sai Prasad and Durbhakula Vamsi Sai. Investigators are actively tracking the diverted funds and preparing to initiate legal proceedings. The developers and their associates are suspected of funnelling the misappropriated funds to other entities, leaving both buyers and financiers at a significant loss. Authorities are reportedly widening the investigation to identify all individuals and entities involved in the scheme.

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