The deep in debt Jaiprakash Associates missed its fourth deadine to deposit Rs. 2000 crore towards refunding homebuyers, incurring the Supreme Court's wrath. The SC has ordered that non-institutional directors present themselves before the court on November 22, and disclose their personal assets. The company failed to deliver apartments to over 32,000 home buyers in Greater Noida.
The SC is now examining ways and means for how these homebuyers can be refunded. At stake is also a deposit amount of Rs. 593 that is lying in the company's account with ICICI Bank. When the court attempted to direct the bank to provide this money for refunds, ICICI Bank refused, noting that the money was earmarked for payment towards JP Associates' lenders. On a standalone basis, the company has debt in excess of Rs. 25,500 crore at the end of 2017. The company's share price has fallen by double digits on the news. The firm's descent into debt was triggered by the 2008 financial crisis - a steep fall for a company that once delivered investors with multibagger returns on the stock market from 2004-07.
The company was recently in the news and saw an uptick in share price after superstar shareholder Rakesh Jhunjhunwala had bought shares in the June quarter. However, the September quarter portfolio indicated that Jhunjhunwala's holdings in the firm are now below 1% of the company.