Homebuyers together collected about Rs 14270 crore in Unitech, but the company misused the money. Forensic audit found that out of the projects for which the money was taken, Rs 5063 crore was not used. So 74 projects got stuck in the middle.
The central government has decided to take over the company, giving relief to Unitech’s 30,000 homebuyers. Unitech directors misused most of the funds from homebuyers and other sources, which led to the hanging of all projects. Homebuyers together collected about Rs 14270 crore. The Center has clearly told the Supreme Court that it will not invest money in it, but other options will be worked out.
This is the second time the Center has taken over a company like this. Earlier in 2009, Satyam took over of the government, later Mahindra IT took over the company. Under the Supreme Court order, the government has appointed former IAS officer Yaduvir Singh Malik as chairman and managing director. Apart from this, it is also proposed to appoint 6 other directors.
5063 crore rupees not used
According to the forensic report, homebuyers had collected about Rs 14270 crore. Apart from this, Unitech has taken a loan of Rs 1806 crore for 74 housing projects from 6 different financial institutions. According to the audit report, the company did not use Rs 5063 crore (40 per cent).
Fraudic audit revealed rigging
The company’s forensic audit found that the company’s promoters misappropriated thousands of crores of rupees, making it difficult for the management to continue with the ongoing projects. Later, the Supreme Court asked the central government to take over the company. The government itself started this process in 2017, but the process was stopped at the behest of the Supreme Court.
Government can also adopt liquidation process
On behalf of the Corporate Affairs Ministry, the court said that the Center will not invest money in the unfinished projects of Unitech. Directors who are appointed will be protected from legal process. It is possible that the court will ask the newly appointed board to vacate the unsold inventory and the court can release the hold fund if needed. Apart from this, the government can also adopt the liquidation process.
Over 250 subsidy companies
Unitech was informed by the Center in the court that the group has more than 250 subsidy companies, including 32 foreign subsidy companies. Apart from this, Unitech Group also has foreign associates in countries like Libya, Cyprus, British Virgin Iceland, Channel Iceland.
Author- Suvigya Jain Singhi is Charismatic and energetic legal advisor with eight years of career experience in business and legal environments.