The Unitech Group's government-appointed board has filed a petition seeking the release of INR 1,257 crore in assets seized by the Enforcement Directorate during a money-laundering investigation into alleged fraud by former promoters. The ED has shown willingness to restore these properties, which would allow the board to resume construction on stalled projects, helping thousands of waiting homebuyers. The board claimed that the diversion of funds resulted in liabilities over INR 25,000 crore and significant losses. It proposed delivering homes at the original booking prices, despite increased construction costs, while highlighting the need to restore the detained properties.
The government-appointed board of the Unitech Group has approached the court seeking the release and restoration of assets valued at INR 1,257 crore, which were seized by the Enforcement Directorate during a money-laundering investigation into alleged fraud by the former promoter directors of the real estate company. The ED has indicated to the court that it is "willing" to release the properties. If the court grants this request, the board will be able to use the resources to resume construction on Unitech's stalled projects, providing relief to thousands of individuals who have been waiting for years for their homes to be delivered.
In its petition, the board stated that the properties seized by the ED were available for use by the government-appointed board for construction and settling claims of other stakeholders. They highlighted that they had a "legitimate interest" in these attached properties, as noted in a petition reviewed by ET. Sources informed ET that senior ED officials and the company board had recently met, during which the agency encouraged the board to file the petition to facilitate the restoration of the seized properties. The court was expected to make a decision on the petition in the second week of October. In its petition, the board argued that the former promoter-directors had collected money and incurred liabilities to over 17,000 homebuyers, to whom residential units (plots, villas, floors, and flats) and commercial spaces were sold from 2005 until around 2016, with the majority sold between 2009 and 2014.
The board stated that the money received from the homebuyers had been diverted for other purposes, primarily for the personal gain of the Chandras, the group's former promoter-directors. It noted that the homebuyers had been waiting for the completion and delivery of their properties, which could not occur due to significant financial losses caused by the diversion of funds. The board also mentioned that the task of completing these units was now being handled by the union government-appointed board and highlighted that the confiscated properties needed to be restored to the homebuyers, who had taken loans from banks and were currently living in rented accommodations.
The board noted that the homebuyers had been doubly prejudiced, as they were paying interest on loans taken for their dream homes while also paying rent because the units had never been constructed or delivered. Therefore, the petition stated that the government-appointed board had proposed completing and delivering homes to these homebuyers at the original prices at which they booked the units, despite significant increases in construction costs. The board sought to address this additional burden of increased costs while requesting the restoration of the attached properties.
The board claimed that the diversion of funds by the former directors and promoters had led to accumulated liabilities exceeding INR 25,000 crore to various authorities, including those in Noida, Greater Noida, and the Haryana government. It argued that the Unitech Group incurred a "quantifiable loss" of over INR 5,000 crore due to the diversion of homebuyers' money by the former promoter-directors to related offshore and onshore entities.
The situation surrounding the Unitech Group highlights the significant impact of financial mismanagement on homebuyers and the real estate market. The board's efforts to reclaim the detained assets reflect a critical step toward addressing the longstanding complaints of thousands who have faced uncertainty and financial strain. If the court approves the petition, it could pave the way for the completion of stalled projects, restoring hope to affected families. The ongoing legal proceedings emphasise the need for accountability in corporate governance, particularly in protecting the interests of stakeholders in the real estate sector.
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