Unitech which is the Second largest investment company has been in news recently for all the wrong reasons. Recently, the Government had decided to take over the management of the company i.e., the National Commission Law Tribunal (NCLT) had permitted the Government to appoint the nominee directors of the Company on the other hand the NCLT had suspended eight of the Directors on the Board of the Company. This extreme step was taken last nine years ago, when the government had taken over the management of Hyderabad-based IT Company “Satyam”.
This surprizing decision taken by the Government was pending for quite some time, as the UNITECH is facing insolvency proceedings. The government has filed petition in NCLT as per the provision of Section 241 of the Companies Act, 2013 which talks about “Application in case of Oppression and Mismanagement” and notified that it can appoint directors with a term of reference which would be enclosed by the Government in order to completion of Projects. The Government had appointed 10 directors in order to manage the various affairs of the company.
There were complains of mismanagement, which endangered the interest of the stakeholders especially the home buyers. Subsequently, Unitech was asked to respond within four weeks to appeal given by the Ministry of Corporate affairs which was directed by the Tribunal by issuing a notice to the Company and had also taken action by suspending the rights of the directors to sell, mortgage or generate any sort of change in the assets or property of the Company.
Courtesy/By: V.S. Krishna
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19 Dec 2017
