Unitech approaches NCLT against move to take over management

Hours after the NCLT suspended its eight eight directors, Unitech today approached the tribunal contending that the government had not informed the forum of Supreme Court bar any coercive action against the company.

In a high drama at the National Company Law Tribunal (NCLT), Unitech first suffered a jolt when its eight (rpt) eight directors were suspended by the tribunal, which allowed the government to appoint 10 nominee directors.

Ramesh Chandra-led Unitech approached the NCLT in the afternoon saying 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 off of funds by the management.

When the tribunal assembled for post-lunch hearing, the counsel representing Unitech approached the NCLT, contending that government has not presented 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 off of funds by the management.

The NCLT has also issued notice to Unitech Ltd directing it to file a reply over the matter.

"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 Kumar said pronouncing the order.

Additional Solicitor General Sanjay Jain, appearing for the government in the 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 nearly 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 to 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 of 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.