June 15, 2024

In 2013, a major scam orchestrated by A&A Construction was revealed by Weekly. The scam involved deceiving investors into putting money into fraudulent real estate projects. Once exposed, the company was placed under administration and a proposal for resolving the mess was put forward in August 2013. But what has happened since then? How much more of a price will the victims have to pay? And when will they finally be able to occupy their long awaited bungalows?

“According to our schedule, we’ll finish everything by the end of October and start delivering the bungalows by early November this year,” said Yacoob RAMTOOLA of BDO.

The Kessewnath family has been operating A&A Construction since 2004, selling houses across multiple projects in the north of the island. The scheme involved deceiving investors to fund real estate projects that didn’t actually exist. They would then move the funds to a financial company they also owned. This exposed a complex real estate Ponzi scheme, revealed by Weekly’s series of articles in April 2013. The company not only duped its customers, but also owed approximately Rs142 million to various creditors and contractors, along with Rs5 million in unpaid wages to their employees.

By August, administrators worked on a solution: for six of the projects, fraud victims would need to pay between 32-40% above the contract price in order to receive their promised bungalows. This was seen as the lesser evil, as the alternative would have led to company liquidation. What has happened since then? Unfortunately, all victims now have to pay the full 40% increase.

“There’s no middle-ground between the 32-40% increase. It’s confirmed at 40%,” said M.A., a victim of the scam. The total additional cost will be roughly Rs750,000, according to Yacoob Ramtoola. The reality however, is that additional payments have already been significantly higher, causing further burden on the victims.

Furthermore, the properties being given are simple structures equipped only with basic utilities and connections. Customers thus face the double whammy of having to pay more for less. Despite this, they accept the deal out of fear of losing everything.

“According to our timeline, all the work will be done by the end of October and the bungalows will start being handed over from the start of November,” Ramtoola explained.

An open day would be arranged for customers to see the progress and take solace in the signs of hopefully impending closure. Despite the hardship endured, and ongoing, victims look forward for an end to this unfortunate chapter.

This story is a modified version of the article featured in Weekly’s edition from August 7th to 13th.

Frequently Asked Questions

Who were the people behind A&A Construction scam?

The scam was orchestrated by the Kessewnath family, who operated A&A Construction since 2004. They deceived investors into funding non-existent real estate projects, and then transferred the funds to a financial company they also owned.

What was the resolution proposed for the victims of the scam?

Administrators proposed that victims, for six of the projects, pay an increase of 32-40% above the agreed contract price in order to receive their promised bungalows. All victims now have to pay the full 40% increase.

What will the victims receive for the extra money they are paying?

Victims are set to receive basic structures fitted only with primary utilities and connections. This means they’re essentially investing more than agreed but receiving much less in return. However, fearing complete loss of their investments, most victims have accepted the deal.