Unitech approaches NCLT against move to take over management

Hours after NCLT debarred its 10 directors, Unitech today approached the tribunal contending that the government had not informed the forum of Supreme Court bar on any coercive action against the company. In a high drama at the National Company Law Tribunal (NCLT), Unitech first suffered a jolt when its 10 directors were suspended by the tribunal, which allowed government to appoint their replacements. Ramesh Chandra-led Unitech, approached the NCLT in the afternoon saying that no “coercive steps for execution” can be taken in view of a November 20 order of the Supreme Court. Earlier in the day, Unitech was dragged to the tribunal by the government seeking to take over the functioning of the firm alleging mismanagement and siphoning of funds by the management. The counsel representing Unitech approached the NCLT, when the tribunal assembled post lunch hearing, contending that government has not shown the facts correctly. The tribunal would hear the matter later this afternoon. In the morning, a two-member NCLT bench headed by Chairman Justice M M Kumar also directed the government to give 10 names by December 20, the next date of hearing. The tribunal’s direction came over a petition filed by the government to take over management of the company alleging mismanagement and siphoning of funds by the management. NCLT has also issued notice to Unitech Ltd directing it to file reply over it. “In view of the fact and satisfaction of basic criteria for interim directions, a prima facie case is made out and in larger public interest we grant the interim directions,” Justice MM Kumar said pronouncing the order. Additional Solicitor General Sanjay Jain, appearing for the government in NCLT, said: “They (tribunal) have permitted the central government to appoint 10 nominee directors to run the day to day business and list of that would be given by 20th December.” He further said, “We want to avoid insolvency of this company, otherwise the 19,000 home buyers will be left high and dry.” Moreover, there are around 51,000 depositors of Unitech. Nobody had appeared for Unitech in the morning. Jain told the tribunal that the government tried to serve Unitech an advance copy of the petition but Unitech refused to accept it and the official was not allowed enter Unitech’s office. According to Jain, the NCLT has also directed that the “suspended directors of the company shall not sell, mortgage or create charge either their properties or company’s properties”. In April this year, the Economic Offence Wing (EOW) of the Delhi Police arrested Unitech Ltd’s Managing Director Sanjay Chandra and his brother Ajay Chandra for allegedly not developing a project despite receiving funds from investors. The company has over Rs 6,000 crore debt with more than 16,000 undelivered units from a total of nearly 70 projects.