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The Economic Offences Wing (EOW) has registered a case against Edelweiss and 15 associate companies, following Ecstasy Realty Pvt Ltd's complaint of misappropriating INR 750 crore. The dispute involves the Raisakaran project in Andheri (West), where Ecstasy Realty alleges only INR 600 crore of a INR 1,350 crore loan was disbursed, with the rest misused. The complaint also accuses Edelweiss of selling mortgaged flats below market value and raising interest rates without consent. Edelweiss denies wrongdoing, claiming Ecstasy Realty owes INR 480 crore. The case is now under EOW investigation, with legal proceedings ongoing in multiple forums.
The Economic Offences Wing (EOW) has registered a case against Edelweiss and 15 of its associate companies following allegations by Ecstasy Realty Pvt Ltd of misappropriating INR 750 crore. The case was initially filed at Amboli police station in Andheri West, Mumbai, and accuses Edelweiss of diverting loan funds, selling mortgaged flats below market value, and unilaterally increasing interest rates. Advertisement
The case centres on the Raisakaran real estate project in Andheri (West), where Ecstasy Realty had secured a INR 1,350 crore loan from Edelweiss Group. However, the complaint alleges that only INR 600 crore was disbursed, while INR 750 crore was improperly used by continuously renewing loans to hide repayment defaults.
The FIR states that the alleged fraud took place between March 26, 2018, and June 26, 2022. Ecstasy Realty also claims Edelweiss sold mortgaged flats for significantly less than their market value-properties worth INR 12-13 crore were allegedly sold for INR 7-9 crore. Specifically, flats 602 and 702 in the Parthenon project were sold below the revised market rate. Multiple attempts to confirm this information with both parties remained unanswered at the time of publishing.
Another allegation is that Edelweiss increased the interest rate from 15% to 16.25% during an 18-month moratorium period without Ecstasy Realty's consent, allegedly siphoning off INR 61.68 crore through related companies. Edelweiss has denied the allegations in multiple press reports.
Edelweiss claims that Ecstasy Realty still owes INR 480 crore plus interest under Non-Convertible Debentures (NCDs) since April 2022. The company highlighted ongoing recovery actions, including a case in the Debt Recovery Tribunal (DRT), cheque bouncing cases, a preliminary EOW enquiry, and insolvency proceedings in the National Company Law Appellate Tribunal (NCLAT). Edelweiss maintains that the FIR lacks specific criminal charges and is an attempt to prolong litigation.
EOW has taken over the investigation into the allegations. With both sides strongly contesting the claims, the case is set to unfold across legal and financial forums in the coming months.
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