Embroiled in several cases from home buyers, which landed its managing director Sanjay Chandra in jail, realty major Unitech faces a take over by government, according to a Bloomberg report.
The corporate affairs ministry has moved the National Company Law Tribunal to take management control of realty major Unitech on grounds of mismanagement and diversion of funds, said the Bloomberg report.
The Economic Offences Wing of the Delhi Police arrested Chandra and his brother Ajay in April 2017 for allegedly cheating buyers and siphoning off clients’ money to foreign accounts. Unitech had also failed to complete housing projects in Greater Noida and Gurugram on time and the company’s management did not refund the money along with the interest. Unitech had yet to deliver possession of 16,299 flats worth Rs 7,816 crore to investors in 61 projects.
The Supreme Court denied Chandra bail until the company deposited funds with it to protect the interests of such buyers.
According to Bloomberg, the ministry of corporate affairs has sought suspension of Unitech’s existing board of directors and its chief financial officer in a petition filed with the National Company Law Tribunal under the Companies Act, 2013. The government wants to replace the board with 10 of its own nominee directors in the interim.
The government has also appealed to the tribunal to restrain the existing directors and CFO from selling, mortgaging, creating a charge or interest on their personal properties until an investigation into allegations of siphoning and diversion of funds by the company is complete, according to the petition.
The tribunal is scheduled to hear the government’s plea on Friday.