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Last Updated : | Source: Moneycontrol.com

Unitech board to complete stuck real estate projects in 4 years: sources

A graded timeline for completion of units has been proposed. All 15,000 units would be completed within four years

In a relief to 15,000 homebuyers waiting for possession of their homes for almost a decade, the Supreme Court (SC)- appointed Unitech board has submitted the roadmap for completing the stuck projects of the embattled firm with the apex court. It has proposed to complete the construction of all units within four years, sources privy to the case told Moneycontrol.

As per the resolution plan submitted last week, the board would require Rs 5,000 crore to complete construction of incomplete units.

A graded timeline for completion has been proposed. “All units would be completed within four years,” sources in the know said.


“The primary focus of the board is on completing construction,” they said.

The amount to complete construction would be raised by utilising additional FAR, disposing of land banks some of which are located in prime locations and money receivables from homebuyers. The board is also looking at raising finances from the SWAMI fund, banks and financial institutions, sources said.

“The board has also sought waiver of around Rs 5,000-crore interest and penalties charged by the Noida Authority, a reduction in interest rate from banks, and sale of some assets to raise funds to complete flats and villas,” they said.

As per estimates, Unitech owes Noida Authority around Rs 8,000 crore of which around Rs 5,000 crore is interest and penalties for delayed payment. The liability to banks is estimated to be around Rs 5,000 crore, with interest forming around 40 percent of the amount.

The embattled firm has unsold inventory of around Rs 3,000 crore and land worth another Rs 6,000 crore, sources said.

SC will hear the Unitech matter on July 23.

The apex court, in January, approved the nomination of seven directors to the board of Unitech, now being run by the government. The board was constituted on January 21.

It approved the names of members of the board which include A K Mittal, ex-CMD of National Buildings Construction Corporation (NBCC); Renu Sud Karnad, Chairman of HDFC Credila Finance Service Pvt Ltd; Jitu Virwani, CMD of Embassy Group; and Niranjan Hiranandani, Managing Director of Mumbai-based Hiranandani Group. Prabhakar Singh, Director General, CPWD was also appointed as a director by the court.

Girish Kumar Ahuja has been appointed as the director. He is the Centre’s nominee director of SBI; B Sriram has also been appointed as the director. He is former MD and CEO of IDBI Bank Ltd and former MD of SBI.

SC, on July 7, granted interim bail to Unitech Ltd promoter Sanjay Chandra on "humanitarian grounds" as both his parents have tested positive for COVID-19 and have been hospitalised.

This application for interim bail had been filed by Sanjay Chandra, who is in custody since August 17, 2017. The ground on which interim bail has been sought is that the parents of the applicant, who are 81 years and 78 years of age respectively, have tested positive for COVID-19, the order noted.

Last week, the two brothers filed an application for release on the grounds that Rs 750 crore as directed by the court for grant of bail has been deposited with the court registry, sources told Moneycontrol.

Unitech promoters Sanjay Chandra and his brother Ajay Chandra are currently lodged in Tihar jail for allegedly siphoning off homebuyers' money

On January 23, 2019, the apex court 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 directed the trial court which seized the criminal case against the Unitech promoters to proceed expeditiously in the trial. The Chandras had sought bail then on the ground that they were complying with the apex court order and had deposited around Rs 481 crore.

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' -- 'WildFlower Country' and 'Anthea Project' -- situated in Gurugram.

In 2018, the top court had directed a forensic audit of Unitech Ltd and its sister concerns and subsidiaries. The forensic auditors had 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 had also revealed that around Rs 5,063 crore of home buyers' money and around Rs 763 crore of funds received from financial institutions were not utilised by the company and high value investments were made in off-shore tax-haven countries between 2007-2010.
First Published on Jul 20, 2020 01:49 pm