SC Okays Nominations Of 7 Directors To New Unitech Board

The Supreme Court has approved nominations of seven directors on the board of real estate developer Unitech which will be run by a government reconstituted board of directors which includes HDFC’s Renu Sud Karnad, Hiranandani Group’s Niranjan Hiranandani, Jitu Virwani of Embassy Group, state-run NBCC’s former Chairman & Managing Director Anoop Kumar Mittal.

Yudvir Singh Malik, a retired IAS officer from the Haryana cadre, will be Chairman & Managing Director of the new government reconstituted board of Unitech.

Girish Kumar Ahuja, a central government nominee director, State Bank of India and B Sriram, a former Managing Director & CEO of IDBI Bank are two other directors who have been approved by the Supreme Court. Sriram also happens to be a former Managing Director of the SBI and is currently a part-time member of the Insolvency and Bankruptcy Board of India (IBBI).

Earlier, their names were proposed by the government to the Supreme Court which has given its approval. The government will now appoint them on the Unitech board.

The newly appointed board has been given two months to chalk out and submit a resolution plan for Unitech to the Supreme Court and in the meantime, all ongoing court cases against Unitech have been stayed for the next 60 days.

The Supreme Court may permit Unitech’s new board of directors to raise funds due from the home buyers, and to sell the unsold inventory of stock and the unclaimed inventory available for re-selling.

The Supreme Court is also expected to allow monetization of Unitech’s unencumbered assets for completion of housing units. In addition to this, the Supreme Court may release to Unitech’s new board of directors, funds lying with the court.

It may be recalled that as per findings of an earlier forensic audit report submitted to the Supreme Court, Unitech had witnessed siphoning off of funds which were received from home buyers.

Funds were found to be diverted to offshore tax havens and the previous management had entered into transactions with undisclosed and disclosed related entities. The forensic audit report had also revealed diversion of funds to related Unitech’s companies.