So the Gandhi family is in news again. Recently, Sonia Gandhi’s son-in-law Robert Vadra quietly sneaked into the real estate business, taking a drastic turn from his traditional jewelry and antiques business in Italy. And this time he seems to have targeted none less than the real estate tycoon of India – DLF groups. Born to a Scottish mother, Robert Vadra is not the first one to be associated with DLF in his family. In a famous coincidental meeting in 1981, K. P. Singh the current chairman of DLF got a chance to meet Rajiv Gandhi under a tree in the outskirts of Delhi (now Gurgaon). Rajiv Gandhi had just entered politics. Before that, DLF had been expanding their real estate business in Delhi area. But because of nationalization of land development in Delhi in 1957, DLF found themselves in a bind. This meeting provided DLF with an opportunity to influence the next PM of the country for their benefit.
Years later when Rajiv Gandhi became PM, he ensured that the Haryana government changed its local law to allow private developers, which benefitted DLF the most. It is also well known how cozy DLF is with the Congress government in Haryana and center. It is also alleged by some that DLF gifted two Super Luxury Apartments to the son-in-law of the most powerful family of India. We can only wonder who this son-in-law could be.
Let us now look at DLF as a real estate company. This company has been habitually engulfed in various scams and irregularities and is frequently termed by its customers as ‘crooks’. According to the complaints by some customers to the Competition Commission of India (CCI), the company had ‘abused’ its ‘dominant position’ time and again to either twist arms of their customers by first including ‘discriminative and abusive clauses’ in apartment agreements and then later on unfairly harassing and threatening their customers to extract more money.
Changes to original plans, FSI, and land zoning are very common and are well supported by the lapses in the real estate laws or are beautifully articulated through corruption by DLF. Lot of times the construction is started even before the company receives the title of the land or the approvals from the building departments and various other related agencies.
For example in the case of DLF Park Place in Gurgaon, the project was delayed because DLF departed from its original project of building 13 blocks of 1 floor to build 29 floors instead with reduced plot area, which breached the Haryana Urban Development Act the Haryana Apartment Ownership Act, 1983 (
Similar delays and plan changes were seen in DLF Belaire project in Gurgaon. Initially the project was supposed to be for 18 floors and then was increased to 27 floors. Consumers were never kept up to date with the changes and the extra money that the company earns with the increase in revenue through floor addition never benefits the first few customers who had already paid their dues. List of complaints by various customers for this project is given in following website - http://www.consumercomplaints.in/complaints/dlf-belaire-c64800.html .
With the help of thriving neta-builder-bureaucrat nexus this company had also been involved into yet another scam – the DLF faithful government facilitates precious agriculture land, general village land and forestland for concrete developments by cheating people in the name of utility/infrastructure developments.
Agriculture land is prohibited for any other use other than agriculture. It is also barred from Foreign Direct Investment (FDI), which is a key source of funding for big real estate giants, where 100% FDI is allowed. That is why builders adapt covert ways to grab this land. Indian real estate companies become a back door entry for foreign companies to entre real estate market in India and buy agriculture land (http://www.indianrealestateforum.com/real-estate-discussions/t-backdoor-entry-foreign-companies-realty-2145.html). Consequently, what we see today is that villages are shrinking against the encroaching high-rise luxury apartments/shining office structures with no space for the middle and lower middle class population.
Evidently, in the famous case of 350-acre Leisure and Recreation Project in village Wazirabad in Gurgaon, the land was acquired by the government from farmers at cheap rates in the name of public utilities and then sold it to DLF for around 25 times less than it original value. (http://en.wikipedia.org/wiki/Wazirabad_(Gurgaon)). People were cheated right on their face. Ultimately when this issue was highlighted, the Supreme Court, on 2 February 2011, ordered the Haryana Government to evict "encroachers" from the land (http://articles.timesofindia.indiatimes.com/2011-02-02/gurgaon/28359133_1_private-developers-panchayat-land-village-panchayats)
During the 2008 downturn, another scam surfaced over – the SEZ scam. Initially, the lucrative tax incentives for SEZ lurked the greedy real estate giants to pool in number of ridiculously expensive SEZ premises. With the 2008 bubble burst, when few could afford the same, DLF's K. P. Singh took the liberty to ask the Banks to fund over-priced reality at low interest rates such that Land Banks can be parceled out to the public in the form of Public Equity (PE), thereby washing away their hands from any losses and transferring it to the public instead.
As if all this was not enough, DLF had also been cheating its shareholder in surreptitious ways. As a listed company till 2002-03, DLF’s promoters increased their holdings beyond 90% in violation of SEBI’s takeover code. At the time when it chose to delist its shares, the promoter owned 99.5% shares, leaving rest 0.5% shares for the unfortunate 1,308 shareholders who chose to hang on to their shares. Eventually, through its unfair treatment of minority shareholders, time and again it made mockery of investor protection rules, only setting an example for more companies to delist shares, restructure capital and go public again at the cost of minority shareholders.
As if all this was not enough, DLF had also been cheating its shareholder in surreptitious ways. As a listed company till 2002-03, DLF’s promoters increased their holdings beyond 90% in violation of SEBI’s takeover code. At the time when it chose to delist its shares, the promoter owned 99.5% shares, leaving rest 0.5% shares for the unfortunate 1,308 shareholders who chose to hang on to their shares. Eventually, through its unfair treatment of minority shareholders, time and again it made mockery of investor protection rules, only setting an example for more companies to delist shares, restructure capital and go public again at the cost of minority shareholders.
Before we try to end the endless list of scams it would be unfair if the DLF IPL is not mentioned. DLF was IPL’s title sponsor from 2008 to 2010. DLF IPL is a perfect example of how murky and shadowy the business of black money could be. Black money had swamped not just the real estate sector, which circulates the highest amount of black money in India brought from certain tax havens by major Indian realty firms, but also cricket (especially IPL), politicians (especially Congress affiliated), celebrities (especially Bollywood related). Through the Lalit Modi and Shashi Taroor controversy, where Modi twitted about the sources of money for the Kochi IPL Team, we probably just got a glimpse of how money might be changing hands from underworld/terrorist organizations to cricket, to politicians, to Bollywood and to real estate giants like DLF.
So we just saw how extremely corrupt various fronts of DLF are. Moving back to Robert Vadra, his suspicious and questionable personal life matters pose serious questions on his integrity of staying clean in this dirty business.
All said, it is not baseless to say that the intentions and conduct of the son-in law of the shrewdest and most powerful family of India becomes a big question mark when he join hands with one of the most dubious and dominant real estate company of India.
Article about Vadra joining hands with DLF: http://articles.economictimes.indiatimes.com/2011-03-14/news/28688471_1_business-hotel-robert-vadra-dlf-group
Sun shines over Robert Vadra
Robert Vadra’s entry into the real estate business has been accompanied by a partnership with the country’s largest realty firm, DLF Ltd, a staggering feat by any standards (The Economic Times, 14 March 2011). Hitherto known for the export of faux jewellery and handicrafts, the 42-year-old Vadra quietly switched lanes in 2008, buying up land in Haryana and Rajasthan, a 50% stake in a leading business hotel in Delhi, and attempting to enter the business of chartering aircraft, a quantum jump that certainly merits an explanation.The article can be read at: http://bharatabharati.wordpress.com/2011/03/20/robert-vadra-proxy-tycoon-sandhya-jain/
Sun shines over Robert Vadra
Robert Vadra’s entry into the real estate business has been accompanied by a partnership with the country’s largest realty firm, DLF Ltd, a staggering feat by any standards (The Economic Times, 14 March 2011). Hitherto known for the export of faux jewellery and handicrafts, the 42-year-old Vadra quietly switched lanes in 2008, buying up land in Haryana and Rajasthan, a 50% stake in a leading business hotel in Delhi, and attempting to enter the business of chartering aircraft, a quantum jump that certainly merits an explanation.The article can be read at: http://bharatabharati.wordpress.com/2011/03/20/robert-vadra-proxy-tycoon-sandhya-jain/
This comment has been removed by the author.
ReplyDeleteNice post.
ReplyDelete