Unitech says assets greater than liability; Centre doubts

The Unitech management on Monday told the Supreme Court that its assets are greater than the liability, and that there is no requirement to infuse more funds by the Union government to complete its stalled housing projects.

Senior advocate Kapil Sibal, representing the Unitech management, told a bench headed by Justice D.Y. Chandrachud that he is in agreement with the Centre for not infusing funds to complete its stalled projects.

"Our assets are greater than liability. I agree with Centre's suggestion", said Sibal. He also insisted that Sanjay Chandra, one of the Unitech group promoters, can assist the newly formed Board of Directors, as he in the complete know of the affairs of the company.

The Attorney General K.K. Venugopal contested this argument. "After 2016-17, no balance-sheet has been prepared by Unitech. The forensic report has shown the money meant for projects was diverted", said Venugopal, strongly opposing Unitech's counsel argument.

The Supreme Court has accepted Centre's proposal recommending a seven-member board to take over the management of Unitech. The top court approved the appointment of former IAS officer Yudvir Singh Malik as its CMD. Last month, the apex court had asked the Centre to take over the Unitech, but refused to infuse funds to complete the projects.

The newly approved board will file a report within two months on the resolution framework to sort out the housing mess of Unitech, which includes recommendations on the way forward on the stalled housing projects. The apex court also granted moratorium of 2 months to new board of Unitech Limited from any legal proceedings.

The top court said that it will appoint a retired apex court judge to monitor preparation of resolution framework by newly appointed Board of the Unitech.

Advocate M.L. Lahoti, representing nearly 5,000 homebuyers in Unitech, argued before the court that Centre should infuse funds to complete the projects, as the true picture currently on the value of assets of Unitech is not known.

"The apex court has agreed to continue with the Justice S.N. Dhingra committee undertaking the selling of assets of the company, after the government takes over. Unitech has also siphoned of a majority of funds meant for housing projects. And, in the absence of balance-sheets, not sure the assets could generate funds to complete projects", said Lahoti.

On the Contrary, a group of homebuyers' have expressed content that Unitech has come out with a statement on its assets. Vivek Tyagi, president All India Association of Unitech Homebuyers, said, "We thank the Supreme Court for finally doing what was required to be done to safeguard homebuyers' interest. The real good news is that assets of Unitech are more than liabilities even today as per the government of India. No homebuyer should worry; all will get refund/home."

The top court also refused to appoint Unitech Group founder Ramesh Chandra, on the new board.

The court also approved the names of members of the board which include Niranjan Hiranandani, Managing Director of Mumbai-based Hiranandani Group; A.K. Mittal, ex-CMD of National Buildings Construction Corporation (NBCC); Jitu Virwani, CMD of Embassy Group; and Renu Sud Karnad, Chairman of HDFC Credila Finance Service Pvt Ltd.

The court noted an independent and professional board will take control of the company, which is in the interest of homebuyers. The court also indicated that it would stop monitoring the Unitech matter, after issues are removed and things fall in place.IANS