The newly-constituted board of directors of embattled real estate firm Unitech is hopeful of finalising the resolution plan to complete stuck projects by March 15 and submitting it before the Supreme Court by the end of March, sources aware of the matter told Moneycontrol.
The board has appointed Deloitte to prepare a resolution plan for the company, sources said.
Replying to an email from Moneycontrol, a spokesperson from Deloitte said, “We are bound by confidentiality obligations and are unable to comment on client-specific matters.”
“The board is expected to discuss the resolution plan submitted by Deloitte at its meeting scheduled for March 15. Any changes or amendments to the plan would also be discussed the same day,” sources said.
And, how will it raise funds to complete the stuck projects?
It should be noted that at the last hearing on January 20, the Centre made it clear that it would not infuse any funds for completion of pending projects of the company.
Some seed money may be required to kick-start the projects.
“This may come from the amount currently held with the court’s registry, monetization of land banks held with the company and registration of completed units. The Board also intends proposing certain concessions to the court which may be enough to complete the around 12,000 stuck housing units within a period of three years,” sources said.
The board may also access the government’s Rs 25,000-crore fund for last-mile financing of the projects at a later date, sources said.
SC, in January, approved the nomination of eight directors to the board of Unitech, now being run by the government. The board was constituted on January 21.
On January 20, the top court allowed the Centre to take the total management control of the embattled realty firm and appoint a new board of nominee directors. It asked the new board to submit its report in two months on the resolution framework of the company.
It approved the name of retired Haryana cadre IAS officer Yudvir Singh Malik as the chairman and managing director (CMD) of the new board and directed that the existing board of directors of the company would stand superseded.
It had also approved the names of members of the board, which include Anoop Kumar Mittal, ex-CMD of National Buildings Construction Corporation (NBCC); Renu Sud Karnad, Chairman of HDFC Credila Finance Services Pvt; Jitu Virwani, CMD of Embassy Group; and Niranjan Hiranandani, Managing Director of Mumbai-based Hiranandani Group. Prabhakar Singh, Director General, Central Public Works Department (CPWD), was also appointed as director by the court.
Girish Kumar Ahuja has been appointed as the director. He is the Centre’s nominee director at SBI; B Sriram has also been appointed as the director. He is the former MD and CEO of IDBI Bank and former MD of SBI.
It also refused to appoint Unitech Group founder Ramesh Chandra, as a member of the new board saying that it would not be appropriate at this stage.
Unitech promoters Sanjay Chandra and his brother Ajay Chandra are currently lodged in Tihar jail for allegedly siphoning off homebuyers' money
The apex court, in its January 20 order, said the new Board of Directors might consider this aspect of surplus land in the preparation of resolution plan.
The top court directed that any decision taken by the new board should be a collective one and duly passed in a meeting.
The government, on its part, sought immunity for the proposed directors in respect of the numerous litigations pending across the country, involving the company, management and its promoters.
It also sought permission for the proposed board of directors to raise funds due from the home buyers, sell the unsold inventory, monetising the unencumbered assets for completion of the stalled projects.
On December 18, 2019, SC asked the Centre if it was agreeable to revisit its 2017 proposal.
In 2017, the Centre moved the National Company Law Tribunal (NCLT) seeking suspension of the current directors and taking control of the management of Unitech Ltd but later withdrew 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 2006-2014 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 fund received from financial institutions were not utilised by the company and high value investments were made off-shore tax-haven countries between 2007-2010.
The apex court, on January 23, 2019, refused to grant bail to the Chandra brothers. It said they had not complied with the October 30, 2017 order which asked them to deposit Rs 750 crore with the court registry by December 31, 2017. The court had directed the trial court which is seized of the criminal case against the Unitech promoters to proceed expeditiously in the trial.
The Chandras sought bail on the grounds that they were complying with the apex court order and had deposited around Rs 481 crore till now.
The realty firm is facing the wrath of the court in a case related to alleged siphoning of homebuyers' money. The matter pertains to a criminal case lodged in 2015 by 158 home buyers of Unitech projects' -- 'Wild Flower Country' and 'Anthea Project' -- situated in Gurugram.
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