Govt lays out strategy to revive Unitech, says won't use public money

Union Finance Minister Nirmala Sitharaman chairs a pre-budget meeting with economists, in New Delhi | PTI
The Ministry of Corporate Affairs (MCA) has laid out a broad strategy for reviving Unitech, starting with appointing a fresh 10-member board of directors.

The government said it would not pump money into the troubled real estate company. It will instead finance the unfinished housing projects through pending instalments of homebuyers.

The MCA on Wednesday submitted a proposal in the Supreme Court to  take over the management of Unitech.

The new board — which will include financial and technical experts, and an eminent industrialist — will also try to monetise Unitech’s assets, which have not been pledged yet.

Besides, payment of Rs 300-400 crore is due to the company from various state authorities, which the MCA will utilise to fund the construction of houses.

“We need to preserve value as a going concern and then try and maximise the value and resolve. Completion of housing units is the foremost consideration,” a senior government 
official said.

The decision to award the contract of construction will be taken by the board. “We are proposing to take over the management of the company not the ownership… Board will take decisions to revive the company,” another senior official said.

Of the 16,000 homebuyers affected by Unitech’s pending projects, nearly 4,700 want a complete refund, while the other 9,400-odd buyers want either refund or the flat.

The government proposal, however, does not include the provision for refunds. The MCA has also asked the SC to provide legal immunity to the government-appointed board from any legal action as directors of Unitech and sought moratorium on bank loans.

The SC in May last year had asked the government to study the possibility of taking over the beleaguered realty firm and complete its pending projects to protect the interest of the homebuyers, noting that the court lacked expertise in finance or real estate.

A two-judge bench, led by Justice D Y Chandrachud, had asked attorney general K K Venugopal to render his assistance in the matter by convening a meeting at appropriate government levels and check whether Unitech’s projects could be handed over to a state-run firm for completion.

Unitech promoters Sanjay Chandra and Ajay Chandra are in Tihar Jail since August 2017 for allegedly siphoning off homebuyers’ money. The two were arrested by the Economic Offences Wing of the Delhi Police in April 2017. They were accused of duping buyers, who booked flats in their Greater Noida residential project, to the tune of Rs 35 crore.

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