The Supreme Court on Thursday asked the government to look into the possibility of taking over Unitech Limited and completing the pending projects of the company. A two-judge bench led by Justice D Y Chandrachud also asked Attorney General K K Venugopal to render his assistance in the matter by convening a meeting at appropriate government levels and check whether the projects of the beleaguered real estate company can be handed over for completion to a state-owned company.
The government has been asked to consider the possibility of taking over the company and its projects in the interest the homebuyers and because the court itself lacks expertise in the fields of finance or real estate, the top court said.
The two-judge bench, while ordering the withdrawal of all the special facilities given to the company’s promoters Sanjay and Ajay Chandra, also hinted at starting a Central Bureau of Investigation (CBI)-led probe against Unitech. “In the present state of affairs, the court is left with no other alternative than to hand over the investigation to CBI,” the two-judge bench said.
Both Sanjay and Ajay Chandra have been lodged in Delhi’s Tihar Jail since August 9, 2017. They Chandra duo had been allowed a working space by the court to try and negotiate with buyers and investors to raise money and complete the pending projects. Jail authorities had also been directed by the top court to allow Sanjay Chandra's meetings with his company officials and lawyers so that he could raise money against the unencumbered assets of his company.
Earlier this year on January 23, the top court had refused to grant bail to Unitech promoters, as they had not complied with the court's October 30, 2017, order directing them to deposit Rs 750 crore. It had, in December, also ordered a forensic audit of the company’s books and assets. Accounting firm Grant Thornton had been asked by the top court to carry out the forensic audit of the company and all its subsidiary companies beginning January 2006.
Later, during a hearing in February, the top court had expressed its displeasure after Grant Thornton said that it had only received about 45 per cent data from the company’s officials. It had then warned the company of initiating contempt proceedings for obstructing judicial work, and said that all data, including that of ex-employees, must be handed over the forensic auditors.
On Thursday, following a request by the auditors, the top court asked the banks to provide bank statements of the promoters as well as the company within two weeks from now. The top court also warned that if there was any further delay in handing over the said data, it would ask the CBI to take the data from them and hand it over to the auditors.
Of the total 16,000 home-buyers affected by Unitech’s pending projects, nearly 4,700 buyers want a complete refund, while the other 9,400 odd buyers want either a refund, or a flat.
In April 2017, Sanjay and Ajay Chandra were arrested by the Economic Offences Wing (EOW) of the Delhi Police. According to the sleuths of EOW, the Chandras are accused of allegedly duping buyers who had booked flats in their Greater Noida residential project to the tune of Rs 35 crore. The buyers alleged that Unitech failed to complete the project on time and also did not refund the money along with the interest.
"The collateral damage imposed upon the company as a result of the ludicrous, facetious, and fraudulent allegations in this arbitrarily drawn out case has continued to detriment the status of Unitech. However, assisted by these positive verdicts, I can assert with confidence, we have a solid plan of action in order to ensure the future of the company and expediting project constructions. Through collaboration with numerous lenders and asset reconstruction companies, I am optimistic that we will be able to raise the working capital necessary to accelerate construction across all projects," Sanjay Chandra, MD Unitech had said in an interview with Business Standard some time back.
According to a senior executive, who is part of Unitech’s management team, last year the company had been able to hand over 1,500 flats. However, it still needs to do the same for close to 15,000 more homebuyers. The company had been trying to get funds and is in talks to sell its land bank and auction some of its property in Uttar Pradesh. It was also trying to rope in a private equity fund. At the moment, the company has around five to six stalled projects in Gurgaon and roughly the same number in Noida and Greater Noida combined.