Funds ‘diverted’, SC asks Centre to take over Unitech

The order said that the “interim report” submitted by the forensic auditors of M/s Grant Thornton showed that of the Rs 14,270 crore collected from 29,800 home buyers, around Rs 5,063.05 crore was “potentially not utilised... for the construction/execution of the 74 identified projects”.

The bench also directed a probe in the matter

The Supreme Court has asked the Centre to take over the management of the beleaguered real estate group Unitech Limited and appoint independent directors, saying that funds raised by the group from home buyers and financial institutions were “prima facie found to have been diverted, siphoned off and misappropriated”.

Observing that a forensic audit of the group’s accounts had highlighted “diversion of funds to off-shore tax havens” and “related companies”, a bench of Justice D Y Chandrachud and Justice M R Shah also asked the government Wednesday “to take urgent action”.
The order said that the “interim report” submitted by the forensic auditors of M/s Grant Thornton showed that of the Rs 14,270 crore collected from 29,800 home buyers, around Rs 5,063.05 crore was “potentially not utilised… for the construction/execution of the 74 identified projects”.

Similarly, Unitech availed Rs 1,805.86 crore from six financial institutions, out of which Rs 763.06 crore, was not utilised for projects. The report indicated that “between 2007-2010, three subsidiaries of Unitech made investments of Rs 1,745.81 crores in 10 companies in Cyprus”.

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The bench directed that a probe be held “both from the angle of money laundering and other related facets”. The court also ordered a copy of the report be given to the Attorney General of India for further action.

The court also rejected the bail pleas of the group’s promoters, taking “serious note” that despite its successive orders, full data and information relating to the group’s accounts was not provided to the forensic auditors.

The court had earlier sought to know if the NBCC will be able to take over the unfinished projects. In response, Attorney General K K Venugopal said NBCC can only act as a project management consultant, under the supervision of a committee.

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