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Cobrapost stings realtors

Releases documentary showing top executives of dozens of realty firms offering to launder black money

BS Reporter  |  New Delhi 

Investigative web portal com claimed on Thursday that it had exposed how real estate companies across the country offer to launder unaccounted money.

At a meeting with journalists at the city’s Press Club, a short distance away from Parliament House, Aniruddha Bahal, chief of the portal, unveiled an abridged documentary titled Operation Black Ninja.

In the abridged version screened for journalists, executives of about 35 realty companies, one after another, offered to take between 10 per cent and 90 per cent of the unit price of properties in cash or “B component” or simply “Black”.

Among the 35 names, one was a listed company and another had approval from the market regulator to list. The portal’s reporter took an alias of Mohmmad Hizbullah and pretended to be working for a fictitious South Indian politician. In footage shot over 18 months, he offered to buy dozens of flats from various builders, often gaining interviews with the chief executive officers (CEOs) or promoters of the firms.

“Promising to do bulk property transactions ranging from 10 per cent to 90 per cent in are two real estate company CMDs (chairman and managing directors), 10 managing directors, 15 directors and executive directors, three CEOs and COOs, a president and a vice-president, two assistant VPs, four heads of marketing and sales, three general managers, three assistant general managers and many other senior employees,” stated

The video footage showed one employee even offering to take Rs 100 crore in and convert it to white, with help from non-banking finance companies. This is a clear violation of the income tax laws, Foreign Exchange Management Act, Prevention of Money Laundering Act and others.

Senior executives were shown saying that accepting payments in black was nothing new for them and that it was an accepted norm in the sector. “Some of these real estate officials are caught on camera ready to accept abroad via hawala. All this endorses the fact that rampant use of black money is a well-known reality of the realty sector in India,” said Bahal.

The combined turnover of these companies—spread across Uttar Pradesh, Delhi, Haryana, Rajasthan, West Bengal, Andhra Pradesh, Maharashtra and Karnataka — would run into thousands of crores.

  • agreed to accept black money ranging from 10 to 90 per cent of the unit price
  • Many agreed to collect cash from cities other than their operational bases, even from countries such as Dubai, via the hawala route. Some said they did this all the time
  • They would understate the sale price of the property so that the buyer could save on stamp duty
  • They proposed to sell an undeveloped property, even without obtaining necessary approvals for the project, an illegal act
  • Putting the entire black component on their table is a precondition for some developers to close a deal
  • In other instances, particularly with a newly developed project, they would show only the book value of the said property at the time of registry, again not on a par with prevailing market prices
  • Some admit to be dealing in black money and how it was nothing new

First Published: Fri, November 28 2014. 00:49 IST