As the news broke around 1 pm on Wednesday that the bail applications of five top executives accused in the 2G spectrum case were rejected by the special CBI court, family members of these honchos turned teary eyed.
While the wife and son of DB Realty managing director Vinod Goenka were present by his side throughout the hearing, Unitech managing director Sanjay Chandra was seen with his lawyers at the Patiala House Court in Delhi.
Chandra's father and Unitech founder Ramesh and brother Ajay were working the phones and monitoring TV news all through the day at the Gurgaon headquarters of the real estate firm.
In the jam-packed court room, former telecom minister A Raja, Swan Telecom promoter Shahid Balwa and Raja's former secretary R K Chandolia, were present during the hearing. The three were sent to jail earlier this year.
Once the verdict was out, companies, whose executives were sent to judicial custody, clamped down completely.
Officials refused to comment on anything related to the case.
While DB Realty sent out an official statement early evening, Unitech did that much later.
ADAG group remained silent.
The sombre mood in the corporate camp was an antithesis to the sense of achievement felt by CBI officials and prosecutors.
According to N Shridhar, group director (business, strategy and finance), DB Realty, the company would take a decision on the new managing director shortly.
In a statement, the company said all its projects would continue to be executed according to schedule and was also in the process of inviting directors to strengthen the board.
But most property developers in Mumbai were shocked to see visuals of Vinod Goenka and Sanjay Chandra being taken into custody.
"It's very grim. All the four key people are in jail.
Who will run the company? Market sentiment is negative, how will they execute the projects when they are fighting court cases?
"It is a setback for the industry," said a managing director of a real estate company which develops projects in central Mumbai.
Another prominent developer in South Mumbai said, "I do not think they
"At the end of the day, who is fooling whom? The entire system is bad. It is very sad," he added.
DB Realty had recently told Business Standard that it was developing 13 projects, which will add 20 million sq ft in the next four years. Ten of these are under construction.
Unitech issued a statement saying 'such a development in this on-going matter will not have any adverse effect on Unitech or its real estate business, as it was with respect to Unitech Wireless, which is a separate venture in the telecom business'.
The company spokesperson added that Unitech was managed by a competent set of senior experienced professionals and promoters 'and will continue to pursue our growth plans.'
Interestingly, both Unitech and DB Realty have damage-control public relation teams only to handle the 2G scam related issues.
Those in the know of things pointed out that Unitech has a strong management structure in place, and therefore the real estate business would not suffer.
There is a question mark, however, on the telecom business of the group, in partnership with Norway's Telenor.
A source, who did not want to be named, said, it was business as usual for Unitech. Sanjay Chandra's brother has been the hands-on person in the realty business and new projects in the group for quite some time, with support from their father.
Unitech has around nine to 10 real estate projects in hand at present.
Another industry insider said the two brothers had not fallen out with each other, as suggested by a recent news report. In fact, the Chandra family is close-knit.
As for Unitech, it would suffer in the short term, said analysts. And, the morale of the employees?
"They had enough time to accept the blow, as it has been an ongoing issue," an industry source said.
