The Max Tower in Noida raises tax related questions as also issues of fund siphoning. For Noida Authority there are issues pertaining to sub-leasing and penalties that it would have to reckon with and answer. Investigations into Piveta Estates Pvt Ltd and Max Estates Pvt Ltd, both Max group companies, reveal that Analjit Singh cheated the Noida authority by deceitful representation in order to acquire prime property in Noida in gross violations of rules and regulations. Suspicious transactions are also noticed that raise the issue of avoidance of income tax payment.
In our cover story, the entire chain of allotment, changing ownership and funding is revealed. The Noida Authority allotted a commercial land bearing Plot No. C001 Sector-16B, Noida to a consortium of companies and individuals for the development of commercial complex. The lease period was for 90 years. Immediately thereafter, the allottee got the property sub-divided and exited the project. The major part of the sub-divided property went to Boulevard Projects Pvt Ltd, a SPC which in turn was owned by a consortium of companies based out of tax havens with transactional activities that seem doggy.
In October 2016, Boulevard Projects incorporated Wise Zone Builders Pvt Ltd as its wholly owned subsidiary. RoC records show that Max group’s company, Piveta Estates Pvt Ltd entered into an agreement with Wise Zone in 2013, that is before the company came into existence! The agreement was for taking 5 lakh sq ft on lease for Rs 489.31 crore from Wise Zone; it was shown as related party transaction in the FY18 statement of Piveta. It paid Rs 377.48 crore to Wise Zone till April 2017 but in February, 2018 it cancelled the lease agreement and in that financial year (FY18), a write off of Rs 316.49 crore in the Piveta balance sheet was shown. Many companies took Boulevard to NCLT for recovery of their investments under the IBC process, barring Piveta.
At this time few other contemporaneous developments took place. In April 2017, Noida Authority, Boulevard and Wise Zone entered into a sub-lease deed in which a part of the total land was sub-leased in favour of Wise Zone, no stamp duty was paid as Wise Zone was shown as a 100 per cent subsidiary of Boulevard. The very same day, Max Estates (incorporated in 2016 as 100 pc subsidiary of BSE listed Max Ventures and Industries Ltd) acquired Wise Zone. In August 2020, Wise Zone changed its name to Max Towers Ltd. Noida Authority has also a lot to answer for, how did it turn a blind eye to payment defaults, non-completion of project, evasion of stamp duty and sanction sub-leases.
