Unitech extends rally for third day after NCLT order

Unitech Managing Director Sanjay Chandra

Unitech Ltd moved the Supreme Court on Monday against the order of the National Company Law Tribunal (NCLT) over allowing the government to take control of the real estate company.

A bench comprising Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud considered the submission of the real estate firm that its bank accounts have been frozen and the company and its jailed promoters are finding it hard to deposit Rs 750 crore as asked by the apex court. "We are more concerned with home buyers and not the company or those holding fixed deposits", Misra said.

On 8 November, the NCLT allowed the government to appoint new management for real estate giant Unitech Limited, as the Corporate Affairs Ministry sought to take control of the embattled company.

In a rare move, the government had approached the tribunal to take over the management to protect the interest of almost 20,000 home buyers, and 51,000 depositors to whom the company owes Rs 723 crore.

It was expected that the government could appoint about 10 directors, whose names were scheduled to be examined on December 20.

However, now as Unitech moved to the Supreme Court challenging NCLT's decision, it will likely halt the process of appointing new management.

The principal bench of NCLT said that there is a prima facie case of mismanagement.

However, after hearing Unitech's argument separately later in the day, NCLT said its order will be subject to compliance with the apex court's directives.

On October 30, the Supreme Court had directed Unitech to deposit Rs 750 crore by December to secure bail of Sanjay Chandra, the managing director of the company. Sanjay and Ajay Chandra, the managing directors of the company, are now in prison in connection with a criminal case lodged by home buyers of two of the company's projects in Gurgaon. The real estate firm's shares today opened at Rs 8.40 a piece on the Bombay Stock Exchange, after closing at Rs 7.29 on Friday.

The company has over Rs. 6,000 crore debt with more than 16,000 undelivered units from a total of almost 70 projects affecting almost 20,000 home buyers.

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