In September, Shilpa Gupta, director of Emaar MGF Land and wife of the company's managing director Shravan Gupta, acquired 99 per cent stake in two little known companies -Alcove Realtors and Cameo Realtors. She bought 9,900 shares in both the firms. While the deal amount was not in the public domain, at a face value of Rs 10 each, the shares were worth less than Rs 2 lakh.
At first glance, there's only one similarity between Alcove and Cameo - both the firms had a negative net worth of about Rs 34 lakh each. But, a study of Ministry of Corporate Affairs (MCA) filings reveals shocking details. Alcove and Cameo own 50 per cent each in Loam Realtors, which controls Dehradun Tea Company (DTC).
DTC owns 1,127.48-acre land on the outskirts of Uttarakhand's capital under tea gardens, factory and other properties. Though there is no formal estimate of the total land's value, a 2013 report by Business Standard (Who acquired Dehradun's tea estate?) had shown that one-sixth of an acre in the vicinity was sold for Rs 2 crore.
The acquisition has raised eyebrows as it took place weeks before the Uttarakhand government announced negotiations to purchase over 1,100 acres of DTC land for a reported price of Rs 1,728 crore. The Congress-led state government has planned a Smart City in this area and sent a proposal to the Centre in this regard.
"Four rounds of talks have already been held so far with Dehradun Tea Company for (about) 1,200 acres of land and with East Hopman Company (EHC) for 700 acres of land," R Meenakshi Sundaram, vice-chairman of Mussoorie and Dehradun Development Authority (MDDA) told PTI in an interview published on November 30. Sundaram said the talks were in the final stage and about Rs 2,300 crore were needed to buy 1,900 acres of land from DTC and EHC.
Housing and Urban Development Corporation (Hudco) has agreed to grant a loan of Rs 2,200 crore for Dehradun Smart City project and a formal agreement in this regard with MDDA is expected soon.
On December 4, a report in The Tribune newspaper said MDDA and DTC have agreed on a price of Rs 1,728 crore for the DTC land.
1,128 acres: Area of tea gardens owned by DTC
Rs 1,728 crore: Reported price negotiated with government
Rs 116.92 crore: Investments made by Loam Realtors in DTC shares
Ownership structure after September 28: Shilpa Gupta, w/o Shravan Gupta, owns 99% each in Alcove Realtors and Cameo Realtors. These two firms own 50% each in Loam Realtors, which holds 73.38% in Dehradun Tea Company
Source: MCA Filings
After the acquisition of Alcove and Cameo, the Gupta family stands to be the ultimate beneficiary of the proposed Smart City deal. Emails sent to Sundaram and MDDA did not elicit any response.
Interestingly, Shravan Gupta's cousin Kanishka Singh is a close aide of Priyanka Gandhi Vadra. Before this, he used to work with Congress vice-president Rahul Gandhi. Shravan Gupta and Kanishka Singh's grandfather V P Gupta was the founder of MGF group.
Shilpa Gupta bought Alcove and Cameo shares from Rakshit Jain, a senior employee in her husband's office. Jain was holding these shares for nearly a decade. The annual returns of Alcove and Cameo showed that Jain transferred these shares to Shilpa Gupta on September 28, 2015.
Emails sent to Jain and Emaar MGF did not elicit any response.
Alcove, Cameo and Loam were floated in 2006 to take control of the DTC land bank. Loam's latest balance sheet refers to DTC as a subsidiary - it owns 73.38 per cent equity in the defunct tea company at an investment of Rs 116.92 crore.
The 2013 Business Standard report had revealed that all three firms - Loam, Alcove and Cameo - have their registered office at "17-B, MGF House, Asaf Ali Road, New Delhi, 110002."
Experts suggested the complex ownership structure was created to circumvent the restrictions on foreign investors from purchasing agricultural land in India.
Dubai-based Emaar Properties owns significant stake in Emaar MGF.
Main opposition to the deal is Tea Gardens' Employees Association. Its president Chitra Gupta said, "They say the land use can't be changed by private owners. But the government is free to do anything with the land. So, if I buy the land, I can't do anything with it. The only thing the owners can do is to sell it to the government."
She said the owners of DTC wanted the employees, only possible hurdle for a deal, to opt for retirement. For Chitra, who runs a nursery school, DTC and its employees hold sentimental value - her father, Brigender Kumar, had set up the union in 1960s.
She alleged there was no transparency on the pricing front. "They have said that it would be based on the circle rates. MDDA must have given the price to the owners. We have no idea," she said.
"We are waiting for the Centre's decision on the (Smart City) project. I will lead an agitation for the revival of the tea gardens," Gupta added.
All India Trade Union Congress has also threatened with agitation against the deal. "The plan goes against the government initiatives to improve green cover. The tea garden has over 30,000 sesame trees and is a biodiversity hotspot. After our protests, the government has agreed to utilize a smaller area of 350 acres for the Smart City project," said Samar Bhandari, a prominent Left leader.