SC orders forensic audit of Unitech
NEWDELHI: The Supreme Court on Friday appointed a forensic auditor to look into the balance sheets of real estate firm Unitech and its sister concerns and subsidiaries and investigate alleged diversion of homebuyers’ money paid for residential projects.
A forensic audit is an evaluation of a firm’s financial information for use as evidence in court.
A bench headed by Justice DY Chandrachud nominated an auditing firm named Grant Thorton to audit the finances of the company since January 1, 2016.
The order came after the court was told by the counsel for homebuyers that the company was yet to pay ₹450 crore of ₹750 crore to the court registry as per an earlier directive and failed to provide flats to investors. In some cases, the projects have not even started.
The court clarified that the auditing firm will also examine subsidiaries of Unitech, which may have been present before and now have closed down, all the encumbered and non-encumbered properties, and also movable and immovable assets of directors and family members of Unitech and its subsidiaries.
This is the second time the top court has ordered a forensic audit of the finances of a real estate company. Earlier this year, the court had ordered external and forensic audit of the Amrapali Group, which is accused of diverting ₹3,000 crore of homebuyers money to its sister firms and subsidiaries.
The court asked the auditing firm to appear before it on January 13 so that the draft terms are made clear. The auditor would be at liberty to obtain details of PANS of all directors and family members, the court said. On the next date, the auditor would be required to tell the time frame within which the audit would be completed.
The court ordered disbursement of ₹174 crore presently lying with the SC registry. Fifty per cent of the money would be refunded to those homebuyers who have an order in their favour from any judicial forum. Forty percent would be provided to Unitech, under a court-appointed panel’s supervision, to complete construction of its projects and 10% would be earmarked for those who invested money with the company in fixed deposits.
Advocate Aishwarya Sinha, appearing for homebuyers, welcomed the court order. He said auditing was necessary to find out if money had been diverted by Unitech.
Advocate Pawan Agarwal, who is assisting the court in the matter, said the company has so far deposited ₹347 crore with the court registry, of which some portion has already been disbursed and ₹21 crore has been given to Unitech to construct unfinished flats. The company, however, disputed the figure and said it has paid ₹419 crore.