NCLT Starts Insolvency Proceedings Against Emaar MGF Land
The National Company Tribunal Law (NCLT) has admitted the plea to begin insolvency proceedings against Emaar MGF Land after two homebuyers filed a petition against the developer as it failed to deliver housing units in its Palm Greens project in Gurgaon's KherkiDaula area. The developer had failed to deliver the project by 2015, it also did not refund the amount along with the interest to the affected homebuyers. The project is still under construction.
In December last year, too, two homebuyers had filed a petition against Emaar MGF Land for a delay in delivery of their housing units in The View project in Sector 105, Mohali. The developer was to deliver the project, which is still under construction, in 2012. For this, the NCLT had sent the realtor a show-cause notice. Additionally, during the same time, the Enforcement Directorate also seized assets of former Emaar MGF managing director Shravan Gupta, worth Rs 10.28 crore, under the Foreign Exchange Management Act (FEMA). The former managing director had $ 15.40 million in his bank account maintained with HSBC in Switzerland.
Emaar Properties had entered the Indian real estate market in 2005 in partnership with India's MGF group, investing Rs 8,500 crore through the joint venture Emaar MGF Land. However, the joint venture ended in July 2018.
Earlier in 2018, Emaar India had reported net loss of Rs 230 crore in the first six months of current financial year. According to the regulatory filing, the company’s debt stood at Rs 5,707 crore as of September 2018. In the last financial year, the net loss stood at Rs 724 crore while the total income was Rs 1,363 crore.
After the demerger was announced from MGF Group in 2016, Emaar India has been focusing on completing its existing projects and ramped up construction work at its various projects in Gurgaon, Jaipur, Lucknow, Mohali and Chennai. The company has also secured fund from banks and NBFCs to complete 10,000 units by December 2019. In past two years, Emaar India has completed more than 5,000 units and has 4,500 acres of developable land bank across the country.