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DLF's defence: Gave biz advance to Vadra, not unsecured loan

BS Reporter  |  New Delhi 

More than 24 hours after the Robert Vadra storm broke out, real estate company denied allegations made by India Against Corruption (IAC) on the  possible quid pro quo between the son-in-law of the president and the country’s largest developer.

claimed it did not give any unsecured loan to Vadra and Rs 65 crore was a business advance. While stating the transactions happened on a transparent basis, issued a point-by-point rebuttal late this evening to the charges levelled by of IAC.

DLF said the Rs 65 crore was given as advance for the purchase of two land parcels from Vadra’s Sky Light Hospitality in 2008-09. One of the land parcels was a commercial licenced area spread over 3.5 acre in Sikohpur village, Gurgaon. “DLF agreed to buy the said plot, given its licensing status and its attractiveness as a business proposition for a total consideration of  Rs 58 crore... total sum of Rs 50 crore given as advance,” the company said.

Defending the deal, DLF said,“The average cost of the licensed property in hands of DLF works out to approximately Rs 2,800 per sq ft of FSI (floor space index), which was comparable with similar transactions in that area.”

The other piece of land was in Faridabad, for which the realtor claimed it had paid an advance of Rs 15 crore. However, there were legal issues and got the refund from Vadra.

On the allegation of quid pro quo between DLF and Vadra, where the former was supposedly given 350 acres by the Haryana government for the development of Magnolia project in Gurgaon (where Vadra was allocated seven apartments), the realtor said it had purchased land from numerous individual land owners over the last 25 years and that relevant licences were granted according to laws in the mid-1990s.

It said attempts were being made to confuse the Magnolias project with an independent 350 acre project tendered by the Haryana State Industrial and Infrastructure Development Corporation for a ‘recreation and leisure project’ by a “series of well-advertised international tender processes in 2009”. DLF emerged as the successful bidder after a thorough technical and commercial bidding process carried out in a highly transparent manner, the company said.

It also denied that DLF had been allotted any land by the Haryana, Rajasthan or Delhi governments.

IAC had questioned the 50 per cent stake held by Vadra in Hilton Garden Inn Hotel. DLF clarified that through independent valuations, an enterprise value of Rs 150 crore was arrived at, which combined Rs 80 crore debt and Rs 70 crore worth of equity.

“Accordingly, for a 50 per cent equity stake in the hotel, a sum of Rs 35 crore was contributed by the Sky Light Group,” it said.

It added the hotel continues to suffer financially due to economic slowdown. Therefore, “equity owners have jointly mandated an international property consultant to find an appropriate buyer at the best available market value, which is indicated between Rs 200 and Rs 300 crore”.

On the allegation that a 10,000 sq feet apartment in DLF Aralias (Gurgaon), shown to be purchased for Rs 89 lakh when its market price at the time of purchase in 2010 was Rs 20 crore, the company claimed, Vadra’s purchase at Rs 12,000 per sq ft is among the highest prices at which the company had sold the apartments there.

First Published: Sun, October 07 2012. 00:04 IST