Realty focused private equity firm SUN-AREA Property Partners (formerly SUN-Apollo) has reached an out-of-court settlement with Mumbai-based property developer Rustomjee in a legal dispute related to its investment in the realtor’s flagship company Keystone Realtors.
In a transaction gone sour, SUN-AREA had invested Rs 234.9 crore (out of the proposed sum of approximately Rs 300 crore) in Rustomjee Group’s holding company Keystone Realtors in May 2009.
Last year, the real estate-focused fund’s two associate companies filed a case against the developer, alleging fraud, misutilisation of funds and default in payment of interest, among other violations, as per the shareholders’ agreement.
The firm said its affiliates Mausmi SA Investments and Mausmi Ventures and Keystone Realtors Pvt Ltd have resolved all their differences in the ongoing battle between both the companies.
An entity controlled by the promoters of Keystone has purchased all the securities of Keystone held by Mausmi SA Investments and Mausmi Ventures. It did not disclose the value of the buyback transaction.
As a result, Prakash Kalothia and Sorabh Jain, the two investor nominee directors, have stepped down from the board of Keystone.
Boman R. Irani, chairman of Keystone said, “I am pleased to announce that given the tough macro-economic environment, this is a significant exit for a real estate fund in a 4-year time frame. This continues to show our commitment to investors and shareholders who have always believed in us.”
A spokesperson of the investment firm said, “We are happy to have reached a cordial settlement with Keystone.”