Unitech Case: ED Gets Custody Of Ramesh Chandra, His Daughter-In-Law

A Delhi court, on October 5, 2021, allowed the Enforcement Directorate (ED) to keep in remand Unitech founder Ramesh Chandra till October 9, 2021, as the agency pursues the high-profile money-laundering case the embattled builder is involved in. The court also allowed the ED to keep in its custody Preeti Chandra, the wife of Unitech Promoter Sanjay Chandra, till October 8. Rajesh Malik, an executive of Carnoustie Management (India) Pvt, was also sent into ED custody by the court till October 11. 

The ED arrested the trio on October 4, 2021, in connection with their involvement in a money laundering case worth Rs 2,000 crores.

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ED Attaches Unitech Land Parcels Worth Over Rs 30 Crores In Noida

October 1, 2021: The Enforcement Directorate (ED), on September 30, 2021, attached 29 land parcels belonging to embattled real estate company, Unitech Group. The recent move by the ED, is a continuation of its ongoing probe against the builder, whose promoters are currently in jail on charges of duping homebuyers. The land parcels that were attached on September 30, located in Noida, measured 13,600 square metres and had an estimated worth of Rs 30.29 crores.

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Unitech Promoters Working From Tihar, ED Tells SC

August 27, 2021: The Supreme Court (SC), on August 26, 2021, ordered jailed Unitech promoters Sanjay and Ajay Chandra to be immediately shifted from Delhi’s Tihar jail, after the Enforcement Directorate (ED) informed the court that they had been running the company business from the jail, with the support of the prison staff.

While blasting the jail authorities for attempting to undermine the jurisdiction of India’s apex court, the SC directed the Chandras be shifted to separate jails --- the Arthur Road Jail in Mumbai and the Taloja Central Jail in Navi Mumbai. The SC also directed the Delhi police commissioner to probe the role of Tihar jail superintendent and other staff, for colluding with the Chandras.

The ED also made a startling revelation in the court, saying erstwhile Unitech promoters Ramesh Chandra had been running a 'secret underground office' in Delhi and was visited by his sons Sanjay and Ajay Chandra, each time they were out on parole.

Indicating that the Chandras had made a mockery of the entire judicial system, the ED said they had been helping company officials dispose of company assets from within the jail.

Appearing for the ED, additional solicitor-general Madhavi Divan told the apex court that the Chandras had deputed their officials outside the jail to communicate their instructions to the outside world.

"During one of our search and seizure operations, we have unearthed a secret underground office, which was being used by Ramesh Chandra and visited by his sons when they were out on parole or bail. We have recovered hundreds of original sale deeds from that office, hundreds of digital signatures and several computers, which contained sensitive data with regard to their properties in India and abroad," Divan told the two-judge bench of justice DY Chandrachud and justice MR Shah.

Refuting the claims of the ED, senior advocates Vikas Singh and Siddharth Dave said the agency had made prejudicial arguments to persuade the SC that their clients did not get bail and that their clients had been operating by the rules prescribed in the jail manual.

“What reliefs are given to the new management, had it been given to me, I would have constructed all the flats and delivered it to the home buyers. The court should not act on the prejudicial arguments made by the ED,” Singh said.

The SC, however, passed on order, acting on the ED's claims.

“We are of the view that materials on record indicate that despite the orders of this court, activities are taking place within the premises of the Tihar Central Jail, where the two accused are lodged, which have the propensity to undermine the authority of the court, as also to derail the investigations which have been ordered to be done by the ED including but not confined to the PMLA,” the SC said.  

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SC Rejects Unitech Promoters’ Bail Plea

August 25, 2021: India’s apex court has come down heavily on the promoters of the Unitech Group over the real estate builder duping homebuyers. While rejecting the bail plea of Unitech promoters Sanjay Chandra and his brother Ajay Chandra on August 25, 2021, the Supreme Court said it might consider their petition only after some money from the company’s bank accounts abroad come back to India.

On the appeal of the Unitech advocate Vikas Singh that Chandras were in jail for the last four years and they should be granted bail now, the SC bench of Justices DY Chandrachud and MR Shah said: "You will have to wait until and unless some money from foreign countries comes back...Your clients know where the money is".

An interim audit report has shown the builder company made high-value investments in tax-havens abroad. Using three subsidiaries, Unitech invested Rs 1,745.81 crore in 10 companies in Cyprus between 2007 and 2010. Of this, Rs 1,406.33 crore was written off between 2016 and 2018 by the company.

Meanwhile, the SC has also directed the new board of the Unitech group to reach an agreement with the three asset management companies, tasked with completing the project completion work of Unitech, about the outstanding dues. Unitech board members will now have discussions with Suraksha ARC, JM Financial ARC and Edelweiss ARC about the settlement of outstanding dues of the embattled company and report the outcome of the meetings to the SC within four weeks.

The top court has also directed the Unitech board to talk with the Noida Authority, the Greater Noida Authority and the Haryana government, which have raised objections to the Unitech resolution plan proposed by the SC-appointed board.  The objections by the two authorities and the state government are based on the non-payment of dues by unitech to both the agencies and to the Haryana state government.

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ED Attaches London Hotel In Unitech Money Laundering Probe

Intensifying its probe in the money laundering case against the embattled Unitech Group and its promoters Sanjay Chandra and Ajay Chandra, the Enforcement Directorate (ED), on July 30, 2021, attached a company-owned hotel in London, worth Rs 58.61 crores.

The hotel, named Bed and Breakfast, is owned by Ibournshorne Limited, a UK-based associate firm of the Carnoustie Group. According to the ED's provisional order, made under the Prevention of Money Laundering Act (PMLA), Unitech diverted homebuyers' money worth Rs 325 crores to Carnoustie Group.

"Out of this, Rs 41.3 crores was diverted to the UK after substantial layering through Carnoustie Group, India and through Indesign Enterprises Pvt Ltd, Cyprus," the ED order read.  The money was used to buy the shares of Ibounshorne Limited in the name of Carnoustie Management India Private Limited, a subsidiary of the Carnoustie Group.

The value of attachment in the Unitech case, said the ED, now stood at Rs 595.61 crores. Note that the total proceeds of the alleged misappropriation of funds is at least Rs 5,063.05 crores.

Early in 2021, the ED filed a criminal case under various sections of the PMLA against Unitech and Sanjay Chandra and Ajay Chandra, for illegally diverting over Rs 2,000 crores to Cyprus and the Cayman Islands. The ED investigation against the company and its promoters is based on several FIRs registered by the Delhi Police on complaints of home buyers. The ED has also unearthed a large number of benami transactions by the company in Gurgaon, where the company has its headquarters.

Note that the Chandras have been lodged in Delhi’s Tihar jail since 2017 over their failure to deliver housing projects spread across the NCR. 

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Unitech Case: ED Attaches Land Parcels Worth Over Rs 106 Cr

The Enforcement Directorate (ED), on July 7, 2021, attached land parcels worth over Rs 106 crores, in connection with its money laundering probe against the embattled Unitech Group and its promoters, Sanjay Chandra and Ajay Chandra. The three land parcels, which the federal agency attached under criminal sections of the Prevention of Money Laundering Act, are located in Gurugram.  Since the ED as already attached properties worth Rs 431 crores in the case, the total attachment in the case stands at Rs 537 crores, after this.

"These parcels had been purchased by two dummy entities of the Chandras, namely Erode Projects Pvt Limited and Kore communities Pvt Limited, from the companies of Unitech Group. Both these companies are controlled by the promoters of Unitech Group and proceeds of crime have been transferred to these ,companies after substantial layering in Singapore and the Cayman Islands," the ED said.

Earlier in 2021, the agency had filed a criminal case under various sections of the PMLA against the trouble-hit builder and its promoters, over charges that they illegally diverted over Rs 2,000 crores to Cyprus and the Cayman Islands.

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ED Attaches Unitech Properties Worth Over Rs 150 Cr

March 30, 2021: More than a week after the Supreme Court (SC) took to task the Delhi High Court (HC), for entreating the bail plea of company promoters Sanjay and Ajay Chandra, the Enforcement Directorate (ED), on March 30, 2021, attached various properties of the embattled Unitech Group. The ED move is part of an ongoing investigation in a criminal case against the NCR-based builder and its promoters.

Seized under the Prevention of Money Laundering Act, the worth of the properties, primarily located in the NCR, is over Rs 150 crores. The ED has attached 12 of the company’s land parcels, measuring 48.56 acres, in Gurugram, while also claiming that it has unearthed a large network of benami companies that were specifically created by the real estate developer, for the purpose of money laundering.

"The registered value of these land pieces comes to Rs 152.48 crores and these are owned by the promoters of Unitech Group, through proxy or benami entities like Crown Infra Projects Pvt Ltd, Kore Communities India Pvt Ltd and Joshu Gurgaon SEZ Pvt Ltd. These three companies are part of one Trikar Group/Kore Group, which is a benami investment of the Chandra family of Unitech Group," the ED said.

The agency had, earlier in March 2021, raided nearly 35 premises owned by the builder in the NCR and Mumbai, as part of its investigation into alleged financial frauds involving Rs 2,000 crores.

Recall here that the Delhi HC and a lower court magistrate were reprimanded by the top court, on March 19, 2021, for granting bail to the Chandras, who have been lodged in Delhi’s Tihar jail.

“When we have specifically rejected bail in August (2020), how can the magistrate grant them bail? It is shocking... even more shocking is that the order of the HC and the lower court mentioned the proceedings in the SC and they were aware of the order,” the SC said.

“How dare the HC grant them the liberty to approach a trial court and how dare the magistrate pass the order granting them bail in the face or our order? It is shocking to see the audacity of the magistrate. We are deeply pained," it added.

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Delhi HC Denies Blanket Relief To Jailed Unitech MD For Mediation

The Delhi High Court (HC), on October 26, 2020, refused to offer jailed Unitech MD Sanjay Chandra a blanket relief to physically appear at mediation centres, to settle disputes with homebuyers. Chandra, who has been lodged in Delhi’s Tihar jail since August 2017 over various alleged cases of defrauding buyers, had filed a plea in the HC, seeking permission to be produced physically at the Patiala House Courts Complex in the national capital, to participate in the mediation proceedings.

While refusing Chandra a blanket relief, stating that no such order could be passed, the HC, however, said his applications for the same could be considered by the courts concerned in accordance with the law, on a case-to-case basis.

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Unitech's Stuck Projects Can be Completed in 4 Years: SC-Appointed Board

July, 23, 2020

“A toddler learns his A,B,C's from a school. He grows up to be a top-notch executive working in a cyber park. He buys a house to flaunt his independence. He unwinds in a hotel and catches up with his friends in a clubhouse. He shops in a mall and takes his family to the nearby theme park. And finally, satisfied, he hangs up his shoes in his private villa. A common success story. Except that, Unitech had been a part of his journey all along.” (Sic).

So reads real estate company Unitech's 'philosophy' on its official website. But, the financial mess currently surrounding the embattled group seems to belie the “common success story” it once promised to script.

Some respite has come for homebuyers in the Unitech case, after a Supreme Court-appointed board suggested that 84 stuck projects of the embattled company could be completed in four years, by primarily utilising resources owned by the company. The panel also ruled out any winding up of Unitech. Parts of the estimated Rs 5,000 crore required for completing the stalled projects, proposed the board, could be raised from the centre's alternate investment fund (AIF) SWAMIH while parts could be raised through utilising additional FAR and disposing of land banks. Additionally, the board has also proposed that the Noida Authority waive around Rs 5,000 crore of interest penalty on delayed payments.  

According to the board, the company’s total liabilities stand at over Rs 28,200 crore while its realisable assets are around Rs 3,700 crore.

The many twists and turns

The National Company Law Tribunal (NCLT), in February 2017, had suspended all the eight directors of Unitech, over allegations of mismanagement and siphoning of funds and authorised the centre to appoint 10 nominees on its board. This was the second time after the new Companies Act came into force that the centre had sought to take over the control of a private company – the first was the Jignesh Shah-led National Spot Exchange Ltd. Although the Supreme Court (SC) stayed the NCLT order and restrained the government and lower courts from taking up any coercive action, it rejected the bail plea of the company's promoters, Sanjay Chandra and Ajay Chandra, over their failure to deposit Rs 750 crores, to compensate about 16,300 homebuyers who have been waiting for homes, for years.

Before the SC accepted Sanjay Chandra's bail plea on July 7 this year on humanitarian grounds since both his parents tested Covid-10 positive, the Chandras have been lodged in Delhi’s Tihar Jail, as they have been unable to arrange for the entire bail money. All facilities that were extended to them earlier, to enable them to make arrangements for completing projects, have been withdrawn, because of their non-cooperation in an ongoing forensic audit. The top court, in December 2018, had asked for a forensic audit of the embattled real estate company, from 2006.

The success story

IITian Ramesh Chandra set up Unitech in 1971 with the aim of offering buyers all that was premium. Even today, you have to shell out crores of rupees for a resale unit in any of its completed projects in Chennai, Noida, Greater Noida, Gurgaon, Kolkata, Lucknow or Mohali.

A golden period for Unitech came in 2007-08, when the company was valued at Rs 1.43 lakh crore. It made a net profit of Rs 1,669 crore on a total revenue of Rs 4,280 crore. Its stock hit an all-time high of Rs 547 in January 2008. Amid the real estate boom of the time, the Unitech group, credited with building popular malls like Noida's The Great India Place, Delhi's Rohini Metro Walk and Gurgaon's The Couture and Gurgaon Central, went on to create a land bank of over 14,000 acres.

The mercurial rise of the group in those years could be gauged from the fact Ramesh Chandra and sons Sanjay and Ajay, with a net worth of Rs 30,000 crore, were ranked the seventh-richest in the Business Standard Billionaire Club, 2007.

Betting on its growth potential, Unitech made Millennium City Gurgaon its happy hunting ground, and set up the highest number of its residential projects here. Eight of its “sold-out” projects, 18 “completed projects” and 12 “current” projects are based in Gurgaon, informs the company website. Each unit in these projects is worth over Rs 1 crore.

When an economic slowdown hit the world in late 2008, India's real estate sector also took a blow. Among India's realty hotspots of the time, Gurgaon was one of the biggest casualties, show data available with PropTiger.com. By 2009, the depression facing the sector had capped the growth prospects of the country's major real estate players, including Unitech.

While trying to recover from the real estate turmoil, a successful venture in an unrelated field might have proved greener pastures. In March 2009, it closed its deal with Norway's Telenor to set up a joint venture telecom services company, Uninor, for the India market. But that venture hardly took off and,in fact, added to the pains.

Another jolt shook the group two years later, when Managing Director Sanjay Chandra was arrested in 2011 over his alleged involvement in the Rs 1.85 lakh-crore 2G spectrum scam and Uninor's licence was cancelled. A high-profile corporate divorce of Unitech and Telenor followed, and it was widely covered by the media through 2011 and 2012.

Things came to such a pass by 2016 that the Chandras had to go without salaries for several months, show company records. Today, the company is sitting on a debt of Rs 6,700 crore.

At close of BSE trading on December 15 this year, Unitech's shares were priced at Rs 6.6 apiece – what a fall from an all-time high of Rs 547! – and the listed company had a market value of Rs 1,725.66 crore. Today, the jailed MD is finding it hard to arrange even the bail money for his release from jail.

After the Delhi High Court rejected his bail plea in October this year, Sanjay Chandra moved the SC, challenging the order. The apex court has set a condition that Chandra would get a bail only if he was able to deposit Rs 750 crore by the end of December 2017. Chandra and his company have not been able to do so.

In January last year, Sanjay told the SC he had not been able to arrange the bail money crore because "buyers do not want to come to jail to meet me". "I have to recover money. These are amounts which I cannot recover because I am in jail. The court may consider granting custody parole for eight weeks," he said.

Following this, the SC on in November directed the Tihar Jail authorities to facilitate Chandra's meeting with his company officials and lawyers so that he could arrange the money, to be used for refunding homebuyers and completing the ongoing housing projects.

Arranging the sum through parleys with his trusted men and investors proved an uphill task for the Chandras, who, until less than a decade ago, were seen as a rising star among the India Inc captains.

How the story has unfolded in 2017

March 31: Sanjay Chandra, who had been out on bail in the 2G case, and brother Ajay were arrested by the Economic Offences Wing of the Delhi Police for allegedly duping homebuyers in a Gurgaon project.

August 11: The Delhi High Court rejected Sanjay Chandra's bail plea in a criminal case lodged in 2015 by 158 homebuyers who had purchased flats in two of Unitech's Gurgaon projects, Wild Flower Country and Anthea Project.

October 20: Chandra was asked by the Supreme Court to deposit Rs 750 crore with it by December-end as a precondition for granting bail.

November 20: The SC directed Tihar jail authorities to facilitate Chandra's meeting with his company officials and lawyers to enable him to arrange money for refunding homebuyers and completing the ongoing housing projects.

December 8: The National Company Law Tribunal (NCLT) suspended all the eight directors of the company over allegations of mismanagement and siphoning of funds, and authorised the Centre to appoint 10 nominees on the board. The NCLT order had come after the Centre moved the panel with a view to protecting the interests of nearly 20,000 homebuyers.

December 13: The SC stayed the December 8 NCLT order allowing the Centre to take over the management of the embattled Unitech group. It said the government should not have moved the NCLT when the apex court was hearing the matter. The Court also said that no lower courts should take up any coercive action against the company chief for now.

MOUNTING TROUBLE IN THE MEANTIME

October 21, 2019

The Noida Authority has cancelled the allotment of a group housing property to crisis-hit realtor Unitech over non-payment of dues worth Rs 1,203 crore. The property concerned is located in Sector 113 where the real estate group had also come up with 17 towers without getting the map cleared by the authority, in violation of the Noida Building Regulation, 2010.  Unitech was served a notice on August 24, 2019 and multiple other notices prior to that, in which it was asked to clear the pending dues. The group is also accused of trying to have an agreement to sell 19,181.50 sq metre of land to Sethi Residents and GMA Developers, making them third-party, without seeking the authority's permission.

September 5, 2019

Offering major relief to 33 buyers, who have been waiting for their homes in Noida Sector 117-located Uniworld project since 2012, the National Consumer Disputes Redressal Commission (NCDRC) has directed Unitech to finish the work in nine months, and pay the hassled parties eight per cent compensation for the delayed period. The apex consumer panel also directed Unitech to pay Rs 50,000 as litigation cost to buyers.

August 26, 2019 

NCDRC tells Unitech to refund over Rs 1 crore to buyers: The National Consumer Disputes Redressal Commission (NCDRC) has asked Unitech to refund over Rs 1 crore to two buyers for failing to hand over possession of an apartment even after a delay of almost six years.

The apex consumer panel asked the company to refund the amount within three months, deposited by D Rameshbabu and Swaroop Nandakumar in Unitech's Gurugram project, 'The Exquisite' Nirvana Country 2. It also directed Unitech to pay as compensation interest at 10 per cent per annum on the principal amount and Rs 25,000 as litigation cost. Nandkumar and Rameshbabu had booked a residential flat with Unitech in 2010 which was to be delivered by October, 2013.