Last week, Saurabh Sharma (name changed), a civil engineer with beleaguered real estate developer Unitech, finally thought the woes of his colleagues and himself with their employer would end, with the National Company Law Tribunal (NCLT) allowing the government to take control of the company.
The petition had been filed by the corporate affairs ministry, alleging mismanagement and diversion of funds. Staff at the debt-heavy entity hoped a new board of directors would save them.
On Wednesday, however, these hopes fell with the Supreme Court staying this December 8 order. “We were hopeful that a new board would start taking corrective measure. The company has a lot of potential and a new board would have been able to turn it around. Just like Satyam, which managed to get sold to another player, we hoped some other company would take over and our jobs would be finally safe. Now, things are back to square one,” said Sharma.
The past two and a half years have been taxing on the 650-odd employees (in its heydays, Unitech had over 1,300). The company has been fighting disgruntled home buyers, angry creditors and a government eager to make an example of an allegedly defaulting realty company estate firm.
Even so, few wished to leave, with the bad state of the real estate market, particularly in the Delhi region. “I want to get another job; work in a company whose reputation is not tarnished. But, there are no openings anywhere,” said Himanshu Taneja (name changed), a site engineer.
Companies in the sector are relieved at the SC order. “Corrective measures are already being taken...there should not be a situation where people are afraid to enter the business. However, companies need to careful and not create a financial mess,” said Manoj Gaur, vice-president at the Confederation of Real Estate Developers of India.
Some of his counterparts say a Satyam-like model wouldn't work in this sector. “The financial trouble Unitech is in is way different from what Satyam or even for that matter MCX (Multi Commodity Exchange) had. No company would be interested in picking up a real estate firm with so many problems. It would be better if the present board is allowed to sort the matter. Yes, the government should ensure the aggrieved parties get their dues,” said the managing director of a Delhi-based realty entity.