The forensic auditors, charged by the Supreme Court to look into the financial affairs of real estate major Amrapali on Wednesday told the court that the company seemed to have only used a fraction of money collected from homebuyers in its several projects and siphoned off the rest with help of internal auditors.

Amrapali’s CFO said he doesn’t remember anything while the relatives of internal auditors got flats in Amrapali’s housing projects, the forensic auditors told a bench of Justices Arun Mishra and UU Lalit. In another instance, some companies with very little net worth, owned by relatives of the internal auditors, got huge contracts, said the auditors, appointed by the top court to look at the money trail and retrieve it if possible.

Justice Mishra then ordered the forensic auditors to place a status report encapsulating their findings so far, so that Amrapali can react to the charges and the court can act against any erring Amrapali executive. The case will come up for further hearing on October 26.

“Relatives of the internal auditors (Anil and Ajay Mittal & Co) got flats without any consideration,” the forensic auditors said. “The bankers, the authorities were all sleeping. No one would sign the contracts that the company signed,” the auditors told the court.

They also suggested that the company’s internal auditors may have been in cahoots with the company in siphoning off the money collected from homebuyers. “Money has been spent partly on the projects. Some has been transferred to other companies, sister companies, in some cases shell companies,” the auditors said.

In one instance, a company related to the internal auditors was giving contracts of crores of rupees over years, the auditors said. Justice Mishra then observed: “The auditors were on it”. This, he said, would tantamount to professional misconduct. “The audit files will then be garbage.” “This is a big, sheer racket, which has to be unearthed,” he said, hinting at recovering all the money by selling all of its leasehold properties should the forensic auditors fail in recovering the homebuyers’ money. Amrapali is facing a cash crunch and has been unable to complete its projects.

The auditors, who were entrusted with the task of tracking the trail of diversion of over Rs 2,765 crore of homebuyers’ money by conducting forensic audit of all 46 companies of the group, told a bench of Justices Arun Mishra and U U Lalit that their preliminary investigations revealed that money was diverted to at least 20 shell companies.

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