The National Company Law Tribunal on Friday allowed the government to appoint 10 interim directors to Unitech’s board after it found that the real estate firm’s affairs were “not being carried out honestly”. The company’s directors were barred from carrying out their responsibilities over alleged mismanagement of funds, according to ANI.
The tribunal also gave Unitech four weeks to respond to a petition filed by the Ministry of Corporate Affairs to take over its management.
The ministry had moved the NCLT, asking it to suspend Unitech’s board of directors and chief financial officer for mismanagement and diversion of funds, Bloomberg reported. The Companies Act allows the Centre to seek a takeover of a company if it runs its affairs in ways contrary to the public interest.
Unitech is facing multiple cases filed by flat buyers who have alleged been duped by Managing Director Sanjay Chandra (pictured above). The Economic Offences Wing of the Delhi Police had arrested Chandra and his brother Ajay earlier this year for allegedly cheating buyers and siphoning off clients’ money to foreign accounts.
The realty firm 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, leaving thousands of buyers in the lurch.
The government’s petition said there were about 19,000 home buyers awaiting possession of flats or houses, and that the company had defaulted on payment of Rs 600 crore to 15,000 small depositors and Rs 880 crore in loans and debentures.