Govt Proposes To Take Over Unitech Ltd's Management
New Delhi: The government may takeover the management of the real estate firm Unitech Ltd in order to provide relief to thousands of its customers. The Ministry of Corporate Affairs (MCA) has filed an affidavit in the Supreme Court for takeover of the management.
If the proposal of the MCA is accepted, new directors will be appointed by the government including a Managing Director. The existing management of the company would be dissolved. The mater will be heard by the apex court on 20 January.
The proposal by the MCA states that for the revival of Unitech Group and effective resolution of the problems of the customers of the company, certain condition will have to be met. One of them is that the new management must get immunity from the actions of the old management.
In an audit of Unitech’s accounts, Grant Thornton had found that thousands of crores were diverted by the company for purposes other than construction. It has also said that some of the funds were invested in tax haven like Cyprus. It had said that of the money that was collected from customers, about Rs 5,063 crore was not used for construction activities. Around Rs 2,393 crore of the customers’ money was not traceable.
The MCA proposal also states that for the resolution to be effective, several government agencies will have to work together. It includes the Noida Authority which has threatened to cancel the land parcels it had allotted to the realty firm because the firm did not pay its dues of Rs 2,734 crore.
The proposal said that senior professionals from the real estate and financial fields would be selected and placed on the board of the company.
The proposal by MCA comes after a directive by the Supreme Court on 18 December 2019 asking the government to take control of the company so that over 13,000 homebuyers of the company are given some relief.
The customers of the firm had earlier filed a petition in the apex court for removal of Promotor Directors from the company.