Tower cranes operate at a residential construction site in the Parel area of Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

Orbit Corp Stock Falls As Mumbai Police Arrests CEO Pujit Aggarwal For Duping Investors  

  • Azad Maidan police arrested Pujit Aggarwal on Thursday.
  • Aggarwal arrested under section 420 (cheating) of the Indian Penal Code.
  • Orbit Corp stock fell as much as 6.1 percent to Rs 6.15 per share.

Pujit Aggarwal of Orbit Corp Ltd. was arrested by the Azad Maidan police under section 420 (cheating) of the Indian Penal Code (IPC) on Thursday.

Capri Global Capital Ltd., the complainant, had paid Rs 2.53 crore for three flats at Orbit Residency Park in Sakinaka, a project launched by Aggarwal and his father Ravikiran Aggarwal. The Aggarwals had mortgaged the project with LIC Housing Finance Ltd. for a loan and were supposed to deposit sale proceeds of all the flats in an escrow account with HDFC Bank. However the money was not deposited in the escrow account, and when LIC Housing Finance took over the possession as Aggarwals defaulted on loan repayment, the finance company did not recognise the claims of Capri Global Capital on the flats in the project, the complaint said.

Police said Pujit had allegedly duped several investors/buyers and lenders like SBI, LIC Housing Finance, etc, and is facing cases at several police stations in the city.

In a statement made to BloombergQuint Capri Global Advisory Serivces Private Ltd., which is a promoter holding company of Capri Global Capital Ltd., said

Promoters of Orbit Corporation Ltd., Ravikiran Aggarwal and Pujit Aggarwal made misrepresentations and suppressed facts regarding their projects with an intention to cheat us in 2012. Without requisite permission they claimed to have development rights and required Floor Space Index (FSI) to carry out their projects Orbit Terraces and Orbit Haven. We had invested over Rs 52 crore in these projects and later on after these projects failed to take off, the Aggarwals asked for a conversion of the transactions into debt , and mortgaged a property they claimed was theirs , which later turned out to be occupied by someone else, and a commercial premises which turned out to be a parking space . When they failed to repay the debt , we deposited the cheques that we had taken as security. When the cheques bounced we filed an RTI (Right to information petition), and found out that the bank accounts had been frozen by the sales tax department . They had issued post-dated cheques with full knowledge that the accounts had been frozen. We then lodged a complaint with the police on the basis of which an FIR was registered and the case in being investigated by the Economic Offences Wing (EOW) of the Mumbai police . They have caused a wrongful loss to the tune of Rs.100.12 crore to us inclusive of principal and interest. 
Capri Global Advisory Services Statement

A high-ranking official at the Economic Offences Wing confirmed that Thursday’s arrest had been made by the Azad Maidan police, and that they were in the process of investigating the complaint that they had received from Capri Global Capital Ltd.