When a previous chief justice of India was faced with insubordination of one of his own judges for real estate munificence, India had blinked. But now no longer, for a long questionnaire hangs over the Blind Lady of Justice and 15,000 homebuyers are left in the lurch.
Avarice and managerial ineptitude have landed Unitech Limited, once the cynosure of all eyes in the real estate sector into a series of scams and corruption. Earlier reputed for its constructional quality and a fine delivery ecosystem, these two malfunctioning genes in its DNA has today left more than 15,000 homebuyers on the streets of NCR, Mohali, Ambala, Kolkata, Chennai and Bengaluru.
Promoters. Sanjay Chandra and. Ajay Chandra had been arrested by the Economic Offences Wing (EOW), under the Ministry of Finance in April 2017 for duping homebuyers of the sterling project named “Anthea Floors”, in Gurugram. The Supreme Court had taken cognizance of the matter and directed that the promoters should deposit Rs. 750 crore for obtaining personal liberty.
The apex court had further directed M/s Grant Thornton to conduct a forensic audit on the company’s financials in order to determine any siphoning of homebuyers’ funds.
In the meanwhile, a system had also been implemented to ensure that the funds were realized by the sale of land parcels owned by the Company. Forty per cent of those funds had been reserved for completion of construction and the rest was reserved for homebuyers and babudom and the court Fixed Deposit holders who were seeking refund of their monies. In the process, 500+ homes were delivered and around 1,100 customers were able to get partial refund of their deposits.
On 18.12.2019, the forensic auditors submitted that Unitech had collected approximately Rs. 14,000 crore and utilised Rs. 9,000 crore directly for the project constructions, and the balance for corporate purposes. The Supreme Court didn’t hesitate to immediately direct the Union Government of India to take over the complete management of Unitech by replacing the current directors with a set of new industry-oriented professionals.
On 20.01.2020, the Board of Unitech was superseded by eight directors namely, Y.S. Malik IAS (Retd), Haryana cadre (Chairman & Managing Director), Mr. Anoop Kumar Mittal, Ms. Renu Sud Karnad, Mr. Jitu Virwani, Mr. Niranjan Hiranandani, Dr. Girish Kumar Ahuja, Mr. B. Shiram and Mr. Prabhakar Singh.
It is quite obvious that the new Directors would not be able to immediately understand the complexity of the company and that they would be able to draw up the Resolution Framework for the way-forward instantly. The apex court directed the new management to submit a detailed Resolution Plan in just two months so that the court could pass appropriate directives to steer the company out of the mess and provide relief to the homebuyers.
The new management drew a Resolution Framework and submitted it before the court in July 2020. The court sought objections and recommendations on the framework from the homebuyers and stakeholders so that any future dispute could be resolved.
There were 1,000 objections from the homebuyers and stakeholders but those were never taken up by the court because the new management through the Additional Solicitor General had always tried to steer the court towards allowing them to act as a developer.
The whole essence of the Hon’ble Supreme Court’s ideology started deviating from here.
After a lapse of three years and nine months, not even a brick has been laid nor has any concrete plan of action been decided upon. It is learnt that despite this, the new management has incurred an expense of over Rs. 200 crore from the company’s account. Who is accountable for this siphoning off of the investors?
Half of the Board Members – all having rich experience in their own fields ‑ have cited personal reasons have recused themselves citing personal reasons. Strangely, the Ministry of Corporate Affairs have accepted such seemingly fallacious excuses without deigning to investigate the reasons of their ’tactical retreat. The ministry has recommended that Uma Shankar, Ex-Executive Director, Reserve Bank of India be put on the board of Unitech Limited, since one female member needs to be there on the board of a listed company. It has also recommended a retired Haryana Cadre IAS officer to be on the Board.
The Supreme Court accepted the proposal but rejected the appointment of the Haryana Cadre IAS officer.
And here is the corporate cloak-and-dagger: the reasons for recommending a Haryana Cadre Retired IAS is a mystery: what led MCA to give the current CMD an extra voting power? The internal confabulations between the directors are being kept hidden from the investing public.
It is a story that would confound Conan Doyle or Ms Christie herself:
A have all the IAS officer is appointed as CMD, initially for a period of two years at a whopping salary of Rs. 4.50 lakhs per month. This babu would perks and would be residing at a posh suburb of New Delhi involving an extravagant monthly rental along with a brand-new luxury car….
But wait… all this shall be perks paid for by Unitech!
But how can they? Weren’t they in financial distress?
The initial tenure as per his appointment elapsed on 20.01.2022, i.e. for a period of two years, but the Ministry – brushing under the [rpverbial carpet the approval of the Supreme Court ‑ extended his tenure for an additional two years.
The CMD regales in his handsome pension and salary both at the same time and enjoys a lavish life on the plight of the homebuyers.
The SC had some reservations, for which they allowed the new Management to engage Property Management Consultants (PMCs) only for estimating the cost of the remaining construction cost.
But the new management deviated from the directions and went on to float tenders and invite the bids. It is learnt that even the selection of the PMCs has not been done in a fair way, and that people close to the CMD were appointed and the process was fabricated to look as if the Board has collectively approved the appointments.
KY Consultant who has been appointed as a PMC, is being managed by K.K Bhugra who is a retired Chief Engineer with the Government of
REPL, another PMC, whose owner. Pradeep Mishra is entangled in multiple court cases due to non-delivery of projects in Lucknow.
VYOM, another PMC, was caught red-handed in scam of bribing a structural engineer in April 2022. Selections of such PMCs again remains as a mystery.
The new management has inducted a CEO who is a retired Haryana Cadre IAS and also have appointed few other retired officials of Haryana Cadre in key positions of the company. The reason for the appointment of such individuals clearly implicates that board members, instead of running the company collectively have left it solely in the hands of the CMD to run his family business.
The new management without even deciding on the issue of addressing the outstanding dues of the authorities and creditors, are trying to exploit the unutilized land parcels and carve out new plots over the same and earn multifold profits out of the same.
Layout are being changed and new plots are being planned over 200 acres of unutilized prime land in Noida but no plan is being chalked out for homebuyers who are unable to get their sub-lease executed for their units which were delivered to them back in 2012.
Demands from the authorities could have been addressed and settled had the new management taken a stand to forego the unutilized land parcels and set off the dues.
So the sum and substance of the story is that, it won’t be wrong to demand of the Almighty what the homebuyers had done to earn the wrath of a powerful conglomerate of the deceitful company, a coalescing babudom and an apathetic – perhaps benign court.
Why instead of discussing on the resolution plan and ad