Supreme Court Allows Govt Takeover Of Unitech Ltd

New Delhi: Marking a new chapter in the real estate industry, the Supreme Court today took an unprecedented decision to allow the government to take over the management of a real estate company-Unitech Ltd.

A government nominated seven member board will replace the current promoters directors. It has been decided that Yudvir Singh Malik will be the CMD of the newly constituted board. Malik is exIAS officer of the Haryana cadre.

The apex court took the decision in view of the delays by the real estate firm in several projects, siphoning off money by the promoters and non-payment of dues to various creditors by the firm. The decision will help more than 13,000 home buyers who had paid part ot whole of the money for properties but have been waiting to get possession for many years now.

The government had proposed taking over the management last month. The proposal was made  by the Ministry f Corporate Affairs which had said that it will look for persons from financial and real estate domains for appointment on the board.

It had also said that for the government to take over the management of the company, support from various stakeholders would be required like from the Noida Authority which had threatened cancelling land allotment to the company over non-payment of dues.  

Reacting to the decision of the Supreme Court, Niranjan Hiranandani, MD Hiranandani Group said, "As an industry patron, I look up to this important responsibility as a public service in a positive light to attempt and assure resolving the issues of numerous stranded home buyers. There is a possibility of at least 50-60% of Unitech's projects ultimately being net worth positive, so I think there is a good opportunity to start these projects early.”

Forensic audit of the accounts of the company were carried out by Grant Thornton. It was revealed in the audit that Unitech promoters had siphoned off large sums of money and even deposited some money in global tax havens.