Shares of real estate investment company Unitech climbed nearly 20% on Monday, two days after the National Company Law Tribunal allowed the government to appoint 10 interim directors to its board.
On December 8, the tribunal had barred all of Unitech’s directors from carrying out their responsibilities for allegedly mismanaging funds. The court had found that the real estate firm’s affairs were “not being carried out honestly”.
Unitech’s shares opened at Rs 8.40 a piece on the Bombay Stock Exchange on Monday, after closing at Rs 7.29 on Friday. It jumped to a high of Rs 8.70, registering a 19.34% climb. Around 2.15 pm, the stock was trading at Rs 8.36.
On the National Stock Exchange as well, Unitech, which had closed at Rs 7.3 a piece on Friday, opened at Rs 8.40 on Monday and touched a high of Rs 8.70, up 19.47%. Around 2.15 pm, it was at Rs 8.35.
Meanwhile, the Supreme Court on Monday agreed to hear Unitech’s appeal against the company court’s decision on Tuesday, PTI reported. The realty firm had also said it was finding it difficult to comply with the Supreme Court’s order to deposit Rs 750 crore by the end of December to pay its home buyers.
The case
The Ministry of Corporate Affairs had moved the NCLT, asking it to suspend Unitech’s board of directors and chief financial officer for mismanagement and diversion of funds. The Companies Act allows the Centre to seek a takeover of a firm if it runs its affairs in ways that are against public interest.
Unitech is facing multiple cases filed by flat buyers who alleged that Managing Director Sanjay Chandra had duped them. The Economic Offences Wing of the Delhi Police had arrested Chandra and his brother Ajay earlier in 2017 for allegedly cheating home buyers and siphoning off clients’ money to foreign accounts.
The realty firm also failed to complete housing projects in Greater Noida and Gurugram on time, and the company’s management did not refund the money along with interest, leaving thousands of buyers in the lurch.
The government’s petition said there were about 19,000 home buyers awaiting possession of flats or houses, and that Unitech had defaulted on payment of Rs 600 crore to 15,000 small depositors and Rs 880 crore in loans and debentures.
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