Uphaar case:Ansals in the line of fire

NEW DELHI: A Delhi court has found Ansal Group promoters, Sushil and Gopal Ansal, guilty in the Uphaar Cinema fire tragedy case in 1997. The Ansal brothers were held guilty under Section 304 A (causing death by rash and negligent act) and some other provisions of the IPC pertaining to endangering human lives by causing hurt. Apart from the Ansal brothers, 10 others were also found guilty, including two MCD officials, a Delhi Fire Service officer and some employees of Uphaar Cinema.

The court is likely to announce the quantum of sentence on Wednesday. The Ansal brothers may face a maximum sentence of two years and a possible fine. However, three managers, one gate-keeper of the theatre and three Delhi Vidyut Board officials may face life imprisonment.

When contacted, Ansal API spokesperson Kunal Banerji said, “We respect the verdict. We are waiting for the sentence to come. After that, we will decide on the future course of action. Meanwhile, our business will continue as usual. Ansal API is a separate entity and has nothing to do with Uphaar Cinema.” Sources close to Sushil Ansal said that an appeal in the high court is being considered.

The market didn’t take kindly to the judgement. The Ansal API stock went down 5.85% to Rs 252.50. Market experts, however, said that in the long run, the judgement will not have any significant bearing on the performance of real estate stocks in general.

“It is an old matter. Things have changed since then. I don’t see any reason to panic,” said Karvy Stock Broking vice-president Ambareesh Baliga. But there are players in the industry who fear a negative impact. “Real estate is largely a game of perception and the credentials of a developer have an important role to play. The sector will have to really walk a tightrope to retain the faith of consumers,” a Delhi-based developer voiced his concern.

However, most other players are of the opinion that this should be treated as a one-off incident and should not be generalised. “There’s a huge difference in the way real estate used to function compared to a decade ago. From being family-run ventures, all major real estate firms are professionally-managed companies now,” said a senior executive in another Delhi-based real estate firm. Real estate experts see the Uphaar case as a turning point for the Ansal group.

The family was one of the first Delhi-based real estate companies to get listed and was one of the three leading developers in North India, along with DLF and Unitech. However, the company’s fortunes have been mixed. As of now, late entrants to the sector such as Parsvnath Developers and Omaxe command a higher market capitalisation than Ansal API.

The Ansal Group was split into three companies in 1998, and the flagship venture, Ansal Properties and Infrastructure was retained by the eldest brother Sushil Ansal, with Deepak Ansal taking over Ansal Housing and Ansal Buildwell going to Gopal Ansal.