PremiumNEW DELHI : The ministry of corporate affairs is set to move the Supreme Court next week with a plan to supersede the board of directors of real estate developer Unitech Ltd., said a person with knowledge of the matter.
The Supreme Court had in December sought a response from the government as to whether it saw any possibility that it could take control over the management of Unitech. The court asked the Central government after a report by forensic auditors showed alleged diversion of funds. The government’s idea is to let an independent group of directors to fulfill the responsibility of completing pending projects and address concerns of home buyers.
The Court will be informed of the ministry’s decision next week, said the person, who spoke on condition of anonymity.
The apex court appointed forensic auditor Grant Thornton investigated into Unitech’s books of accounts in view of home buyers’ complaints that they were not given flats despite the company taking advances from them. Pawan Shree Agarwal, the amicus curiae in this case, had earlier told reporters that auditors had submitted a report stating that at least Rs. ₹5,000 crore of funds had been received from home buyers but not utilized for construction of projects.
In 2018, the government had superseded the board of directors of distressed non-bank lender Infrastructure Leasing & Financial Services Ltd. (IL&FS) with a new board led by Uday Kotak to turnaround the group. Various government agencies are simultaneously probing into the role of officials responsible for the group’s financial mess.
Banks are now on a serious drive against defaulting businesses under the new bankruptcy code and any irregularities noticed in the affairs of big defaulters are subject to multi-disciplinary investigation.
