In­dus Cap moves NCLT against 3 sub­sidiaries of Up­pal Hous­ing

Mint ST - - DEALS - Maulik Vyas & Malvika Joshi MUM­BAI

Pri­vate eq­uity fund In­dus Cap­i­tal Part­ners has moved the Na­tional Com­pany Law Tri­bunal (NCLT) against three sub­sidiaries of Delhi-based de­vel­oper Up­pal Hous­ing Pvt. Ltd cit­ing op­pres­sion of in­vestors, mis­man­age­ment and di­ver­sion of funds.

In its pe­ti­tion filed on 21 Jan­uary, the New York-based fund asked the Delhi bench of NCLT to pre­vent the de­vel­oper from creat­ing any third­party rights on its land parcels. Mint has seen a copy of the pe­ti­tion. The case is yet to come up for hear­ing.

In­dus Cap­i­tal also re­quested the tri­bunal to di­rect Up­pal Hous­ing to give true and ac­cu­rate ac­counts of its sub­sidiaries, in­clud­ing the use of funds where the PE has in­vested.

Ac­cord­ing to two peo­ple fa­mil­iar with the mat­ter, In­dus Cap­i­tal in­vested around ₹320 crore in three sub­sidiaries of Up­pal Hous­ing— Umang Co-de­vel- op­ers Pvt. Ltd, Umang Noida SEZ Pvt. Ltd and Umang Real­tech—be­tween

2008 and 2010.

With the in­vest­ment,

Up­pal Hous­ing cre­ated three com­pa­nies— Umang Real­tech, Umang Noida SEZ and Umang Co-de­vel­op­ers. Umang Real­tech was cre­ated to de­velop mid-in­come res­i­den­tial apart­ments, while Umang Co-de­vel­op­ers and Umang Noida SEZ de­velop town­ships in dif­fer­ent parts of Noida.

Ac­cord­ing to its pe­ti­tion, In­dus Cap­i­tal Part­ners had in­vested about ₹233 crore in Umang Real­tech, hold­ing 52% In­dus Cap­i­tal cites op­pres­sion of in­vestors, mis­man­age­ment, di­ver­sion of funds It re­quested NCLT to di­rect Up­pal to give true and ac­cu­rate ac­counts of its sub­sidiaries

stake since 2010. It also in­vested around ₹45 crore in Umang Noida SEZ for a 40% eq­uity stake, and ₹43 crore in Umang Co-de­vel­op­ers for a 40% stake. The off­shore in­vestor has sought NCLT’S in­ter­ven­tion to re­trieve around ₹288 crore from Umang Real­tech alone, in­clud­ing in­ter­est. It has also re­quested the tri­bunal to di­rect the builder to com­plete the hous­ing project where around 1,000 home buy­ers have in­vested.

Re­fer­ring to Umang Noida SEZ, the pe­ti­tion said, “Re­spon­dents…mis­ap­pro­pri­ated and con­verted to their own use, the en­tire amount con­trib­uted by the pe­ti­tioner (PE firm) and re­spon­dent No. 2 (Up­pal Hous­ing Pvt. Ltd), which was meant to be uti­lized It has also re­quested the NCLT to di­rect Up­pal to dis­close the use of funds where it has in­vested

for the busi­ness of the com­pany to it­self. Re­spon­dent No 2 (Up­pal Hous­ing) also failed to pay the lease pre­mium/rental out­stand­ing un­der the Greater Noida Lease Deed or un­der­take devel­op­ment work.”

Ques­tions emailed to Up­pal Hous­ing and In­dus Cap­i­tal Part­ners re­mained unan­swered till press time.

Anand De­sai, man­ag­ing part­ner of law firm DSK Le­gal which is ad­vis­ing the PE firm, con­firmed the fil­ing but did not share de­tails since the mat­ter is sub­ju­dice.

The Up­pal Hous­ing web­site shows In­dia Prop­erty Fund and Trikona Trin­ity Fund as in­vestors in its other projects, apart from In­dus Cap­i­tal. Ac­cord­ing to the web­site, Up­pal Group was founded in 1979 has de­liv­ered more than 5,000 units and 10 mil­lion sq. ft till date and an­other 20 mil­lion sq. ft is un­der plan­ning and devel­op­ment.

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ABHIJIT BHATLEKAR/MINT

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