The National Company Law Tribunal (NCLT) has barred Unitech Ltd directors from acting as co-directors of the company over alleged mismanagement of funds.
It also issued a notice to the firm after a petition from the Ministry of Corporate Affairs sought its approval to take control over real-estate giant.
The tribunal sought a response from the company in four weeks. It also allowed the government to appoint 10 nominee directors to run Unitech Ltd in the interim.
NCLT will examine the names of government appointed nominee directors on 20 December.
Bloomberg quoted sources as saying that the government has cited mismanagement and diversion of funds as the reason for the move. Bloomberg quoted anonymous sources saying that in a petition filed with the NCLT, the government had asked for Unitech's existing board of directors, and its chief financial officer to be suspended.
Sanjay Chandra, the chairman of Unitech, and his brother Ajay Chandra were arrested by the Economic Offences Wing of the Delhi Police in March, this year, for cheating home buyers as they did not refund the money after failing to complete a project on time.
According to a November report in The Times of India, the two have been behind bars since, as the Supreme Court denied them bail until their firm deposited funds to pay homebuyers who didn't get possession.
According to the petition filed by the government, there are around 19,000 buyers who haven't got possession of their flats or houses. In addition, Unitech owes Rs 723 cr to 51,000 fixed deposit holders.
(With inputs from PTI, ANI and Bloomberg.)
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