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Irked Over Lack of Cooperation in Forensic Audit by Unitech, SC Withdraws Promoters' Prison Facilities

The top court said the Chandra brothers should be treated as ordinary prisoners as per the prison manual of Tihar jail here where they have been lodged since 2017.


Updated:May 9, 2019, 8:26 PM IST
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Irked Over Lack of Cooperation in Forensic Audit by Unitech, SC Withdraws Promoters' Prison Facilities
The Supreme Court of India. (News18 Creative)

New Delhi: Irked over non-cooperation of embattled realtor Unitech Ltd in the forensic audit, the Supreme Court on Thursday ordered the withdrawal of all the facilities given to its promoters, Sanjay Chandra and his brother Ajay Chandra, who are in Tihar jail for allegedly siphoning off home buyers' money.

The top court said the Chandra brothers should be treated as ordinary prisoners as per the prison manual of Tihar jail here where they have been lodged since 2017.

In 2017, the apex court had directed the jail authorities to facilitate Chandras' meeting with their company officials and lawyers so that they are able to arrange the money for refunding home buyers as well as for completing the ongoing housing projects.

It had also said that visit to the jail should be made within the normal visiting hours as per the rules and Chandras' counsel could go there to meet him.

On Thursday, after the forensic auditors told the court that Unitech has not cooperated with them, the top court said it is left with no other option but to order CBI investigation in the affairs of Unitech.

A bench of Justices D Y Chandrachud and M R Shah did not order CBI probe in express terms but said that it would like to have the assistance of Attorney General K K Venugopal on the issue on next date of hearing.

The court said it would also like to hear from the Attorney General on whether the government can take over the management of Unitech Group and its subsidiaries to protect the interest of home buyers.

It said the court would also like to have the assistance of the Attorney General on the point whether the government would like to complete the stalled projects of Unitech with the help of central construction agencies to provide relief to home buyers, who have invested their hard earned money.

During the hearing, the forensic auditors told the bench that officials of Unitech were not cooperating in the investigation or providing details and data of transactions which could enable them to track the diversion of home buyers money to other projects.

Advocate Pawan Shree Agrawal, who was appointed as amicus curiae in the matter, told the court that Gurgaon municipal corporation has initiated auction proceedings for selling a property worth hundred of crores of rupees of Unitech.

The bench then said that it was staying the auction proceedings for now till the disposal of the petition pending before it.

The apex court had on January 23, refused to grant bail to Chandra brothers. It said they have not complied with the October 30, 2017 order which asked them to deposit Rs 750 crore with the apex court registry by December 31, 2017.

The court had directed the trial court which is seized of the criminal case against the Unitech promoters to proceed expeditiously in the trial.

Chandras have sought bail on the ground that they were complying with the apex court order and have deposited over 400 crore till now.

On December 7, 2018, the apex court has directed a forensic audit of Unitech Ltd and its sister concerns and subsidiaries by Samir Paranjpe, Partner, Forensic & Investigation Services in M/s Grant Thornton India.

The forensic audit has been proposed in various phases with the first phase focusing on 74 construction projects and the entities of Unitech involved.

The court had directed Unitech Ltd to identify and nominate two of its Directors who are not in jail and a team of three senior officers for coordinating with the forensic auditors for the purpose of supplying all the data, materials and information as is required by the auditors.

The amicus curiae appointed in the case has said in its report that out of 74 construction projects undertaken by Unitech, as many as 61 were incomplete and about 16,300 home buyers were involved in these projects.

The court had noted that the documents and report of Delhi police disclose a disturbing state of affairs at Unitech in which funds were collected from home buyers and then siphoned off before the accounts were closed

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