SC permits Centre-appointed Unitech Board to seek police assistance to deal with disturbances

SC greenlights police assistance for Unitech Board to tackle third-party interference

The Supreme Court on Tuesday permitted the Centre-appointed board of directors of Unitech Ltd to seek police assistance to deal with “impediments” created by third parties on properties of the embattled realty firm. The apex court had on January 20, 2020, come to the rescue of over 12,000 hassled homebuyers of Unitech Ltd by permitting the union ministry of corporate affairs to take “total management control” of the real estate firm and appointed retired Haryana cadre IAS officer Yudvir Singh Malik as chairman and managing director (CMD).

Unitech promoters Ramesh Chandra and sons Sanjay Chandra and Ajay Chandra have languishing in prison for the past four years for financial improprieties. Till 2012, Unitech was considered India’s second-largest real estate firm. The company’s fortunes have dived down after the firm was caught up in a 2G Scam in 2010. On Tuesday, a bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra took note of an interim plea of the government-appointed board that it has been facing third-party disturbances in effectively dealing with the properties and other affairs of the real estate company.

“It has been clarified that in the event of impediments created by any third party, the board (of directors) can seek police assistance,” ordered the bench. The court also permitted the board of directors to move government authorities to seek redressal of other grievances. The bench also asked the authorities to render assistance to the board of the firm.

Earlier, the top court had said, “The idea of a professional board is to allow them to take control of the company and complete the pending projects in the interest of homebuyers.” It had also granted immunity to the new board from any legal proceedings against for some time and said the proceedings initiated against the firm, subsequent to any court order would also stand suspended till further orders.

The bench had clarified that the newly constituted board can take any commercial decision in the interest of homebuyers and with regard to any pending projects. It had permitted the Board of Directors “to raise funds due from the home buyers, and to sell the unsold inventory of stock and the unclaimed inventory available for reselling”. It also allowed the board to monetize the unencumbered assets of the Company for completion of housing units.

On December 18, 2019, the top court asked the Centre if it was agreeable to revisit its 2017 proposal as there is an urgent need for the projects of Unitech Ltd. To be taken up by a specialized agency, so as to ensure completion in a time-bound schedule in the interest of the home buyers. In 2017, the Centre had moved the National Company Law Tribunal (NCLT) seeking suspension of the current directors and taking control of the management of Unitech Ltd but had later withdrawn the proposal after a stay on its move from the apex court.

In 2018, the apex court directed a forensic audit of Unitech Ltd and its sister concerns and subsidiaries by Samir Paranjpe, Partner, Forensic and Investigation Services in M/s Grant Thornton India. The forensic auditors have also submitted their report which said that Unitech Ltd received around Rs.14,270 crore from 29,800 homebuyers mostly between 2006 and 2014 and around Rs 1,805 crore from six financial institutions for the construction of 74 projects.

The audit revealed that around Rs.5,063 crore of homebuyers’ money and around Rs.763 crore of funds received from financial institutions were not utilized by the company and high-value investments were made in off-shore tax-haven countries between 2007 and 2010. The top court had ordered an investigation into the omission and commission of promoters of Unitech Ltd under the Prevention of Money Laundering Act (PMLA).

For all the latest updates, download PGurus App.

The post SC permits Centre-appointed Unitech Board to seek police assistance to deal with disturbances appeared first on PGurus.