The Supreme Court on Tuesday ordered the auction of assets of directors at Unitech. This is the first time that the Supreme Court has directed auction of a distressed firm.
Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud ordered the SC-appointed committee to auction unencumbered personal assets of Unitech directors. The number of undelivered flats by Unitech stands at 16,299, funds from home buyer stand at ₹7,816 cr and bank loans stand at ₹6,000 cr.
The Court last year ordered Unitech to deposit ₹750 cr by December 31, 2017 but Unitech failed to pay. The Managing Director of the Company Sanjay Chandra and his brother are in jail for a year now.
Auction details
The Court ordered auction of 2 plots of Unitech in Kolkata which will raise ₹116 cr. Earlier the Supreme Court summoned auction of Unitech properties in Agra, Varnasi and Sriperumbudur that will yield a sum of ₹600 cr. However amicus curiae Pawanshree Agrawal told that the auction at Agra has hurdled and the updates on Varanasi are yet to be received.
Amicus curiae is an impartial adviser to a court of law in a particular case
The fall of Unitech
IITian Ramesh Chandra founded Unitech in 1971. The golden period was during 2007-08 when the company was valued at ₹1.43 lakh cr. The real estate boom pushed their stocks to all time high at ₹547 in Jan 2018.
Staking its growth potential Unitech set up the highest number of residential projects in Gurgaon. However when there was global economic crises, India’s real estate sector too took a hit and Gurgoan was the most affected. By 2009, major real estate players faced huge losses, of which Unitech too was a player.
In March 2009, its joint venture with Norway’s Telenor also proved futile and added to the losses. When the MD was arrested in 2011 for his involvement in the 2G scam, the licence to Uninor was cut off and the share price tumbled to ₹6.6 from ₹547.