For 24 months until March 2011, Sky Light Hospitality, a Robert Vadra-Maureen Vadra firm, claimed it owns land worth over Rs 15 crore at Manesar, an industrial town on Gurgaon’s outskirts. However, the Rs 27,000 crore real estate giant, DLF, also claimed it owns these 3.5 acres. The company says it purchased it from Robert Vadra, son-in-law of UPA chairperson Sonia Gandhi, over 2008-09 and that it paid him Rs 58 crore for it. Sky Light Hospitality’s accounts (released to the public by India Against Corruption’s Arvind Kejriwal, who aspires to launch a political party) show it got a tidy Rs 50 crore from DLF as “advance against sale of Manesar land” in 2009-10.
In effect, both the land and the Rs 50 crore payment for it remained in the possession of Sky Light for at least two years after it should have changed hands. (It is not known if the land was transferred after 2011. And Vadra did not respond to e-mails or requests for interviews). But apart from the fact that he’s a businessman married into the Gandhi family, this accounting detail matters to the world at large for other reasons too.
Auditors looking over the balancesheets of Sky Light Hospitality and statements issued by DLF say that when an asset, particularly land, is found to simultaneously belong to two parties, official scrutiny, such as by the income-tax department, often reveals that both parties have accessed bank loans on it. “This is the situation CAs jokingly refer to as ‘Ek phool do maali’. There is every possibility that one or both parties have pledged this property to a bank and got money,” says M.R. Venkatesh, a partner with GSV Associates in Chennai. The documents on Vadra’s companies that have been made public by IAC do not establish that such a loan has been taken. But they do raise “possibilities that deserve to be probed”.
Hilton Garden Inn Vadra uses DLF money to buy stake in their hotel in upscale Saket, Delhi. (Photograph by Tribhuvan Tiwari)
As Kejriwal points out, between 2007-2010, Robert’s companies acquired properties worth over Rs 300 crore, largely due to DLF’s apparent largesse (and thanks to a sizeable overdraft from Corporation Bank). IAC estimates that the value of Vadra’s properties has, by 2012, zoomed to over Rs 500 crore. Vadra’s own books place their value at Rs 70 crore (approximately). According to the IAC, the total share capital of these companies (owned by Vadra and his mother) was just Rs 50 lakh and they had no income from any legitimate business activity, except by way of interest derived from interest-free loans obtained from DLF. “Whether there is a quid pro quo or not should be probed by the government,” Kejriwal told Outlook. “How can the government demand proof from us or ordinary citizens?”
Of course, there is no direct link established between the concessions extended to DLF by Haryana’s Congress government and the loans extended to Vadra. Whether land transfers, including of panchayat land, were for the sole benefit of DLF, whether floor-area ratio requirements were lowered for DLF to unprecedented levels and well in advance of the government’s own deadlines for doing so, apart from other breaks and concessions (which the company denies it got out of turn), only a probe will establish. In fact, there are numerous instances where DLF has a symbiotic relationship with B.S. Hooda’s government in Haryana (see box).
DLF’s transactions with Robert’s firms raise corporate governance concerns too. Both firms were working at cross purposes to each other. As buyer of the Manesar land, DLF loses when Vadra fails to hand it over to them free of encumbrances. DLF loses again after it pays for land it fails to possess/develop. The Rs 50 crore on Vadra’s company’s books, if it fetched interest at 10-11 per cent, would have yielded at least Rs 5 crore to DLF. Interestingly, it’s Vadra who generates the interest income from advances he received.
On any given day, therefore, DLF should be reluctant to do business with Vadra. Yet, what happens next is the reverse. In 2009, Vadra used the ‘advance’ of Rs 50 crore from DLF to purchase 50 per cent equity in another DLF business, Saket Courtyard Hospitality. Thereafter, DLF gives him even more money (and all of this is interest- and collateral-free), Rs 10 crore, as another ‘advance’, which figures on Sky Light’s balancesheet until 2011. Yet another advance, this time to the tune of Rs 15 crore, also came in the same year. Sky Light held on to this money for a year until returning it after a proposed deal fell through. (This Rs 15 crore simply stopped showing up as an outstanding loan in Sky Light’s documents and no interest seems to have been paid).
“Such sums—a few crores—may be a pittance for DLF but they amount to the only source of income for Vadra’s companies such as Sky Light. This is a fit case for examining at least for the tax implications,” says Praveen Nigam of Amplus Consulting in Delhi. A close look at Vadra’s enterprises doesn’t reveal the hectic pace with which his businesses have grown. For instance, Blue Breeze Trading (in the aircraft chartering business) owned agricultural land worth roughly Rs 69 lakh on March 31, 2010, and the sole other transaction was a depreciation claim of Rs 1,641 on a mobile phone worth Rs 10,940. Incidentally, aviation industry insiders aver that Vadra has for long wanted to get into the lucrative sector. (Eight months ago, Vadra visited the Farnborough airport near London where he was said to be studying the feasibility of investing in a Fixed Base Operation (FBO), a service centre for aircraft.)
Given that both DLF and Vadra vehemently deny any wrongdoing, and the government is running shy, the matter is hanging in a limbo. Everyone knows that big real estate deals in the country are murky—more the reason why answers are required as to why a firm whose indebtedness is the talk of the town loaned crores, interest- and collateral- free, to a firm owned by the country’s No. 1 son-in-law.
Wheels, Deals And Mr Vadra
A scrutiny of the balancesheets of Vadra's companies has thrown up many accusations, many more denials
The Manesar Land Deal
Overdraft by Corporation Bank
Faridabad Land Deal
Aralias and Magnolia
A crying shame (Bob The Builder, Yes We Can). The entire edifice of a dynasty started by Motilal Nehru has crumbled. Ah, perhaps now India will get over its obsession with dynasties.
About the DLF doling out crores to Vadra companies, the author says "you have to ask why'". The answer to that "why" is pretty obvious. What however is not so obvious is given that the outlines of some of these quid pro quo deals were already widely known or suspected, why the Indian media for so long lacked the courage and enterprise to expose these scams, leaving it for Kejariwal to pick up the gauntlet. While we applaud Team Kejariwal ( and Ashok Khemka) for this, we are aghast at the spectacle of our media too often turning a blind eye to the misdeeds of the powers that be.This is not what one expects of the Fourth Estate in a true democracy.
Apparently Congresswallahs like Mahesh Nagar and Aftab Ahmed buy land in Rahul Gandhi and Robert Vadra's name and they are given party tickets.
If Robert Vadra is a private citizen of this country, as claimed by the congess and other UPA ministers, then why does is name feature in the list of digniteries exempted from frisking at the airports? why is he given commandoes for security?
I feel sad for the congress ministers; the poor souls were ordereded by MADAM to defend her son-in-law on all forums. You could see the agony on the faces of congress leadres while they were trying their best to defend the so called "Private Individual" of this Banana republic.
Madam had swung the whole government machinery into action to protect her Ladla son-in-law.
Last I heared, Mr. Vadra has been invited by Harward Business School as Hounerary lecturer to teach this new business module he has invented.
Let us be fair, it must be very pleasant to have a person like Mr. Vadra in his social position, he must be a very nice man. It seems, that is why Ms. Priyanka Gandhi must have married him. She and her brother, seem, and are, very nice people. Does anyone disagree?
10/D-52 Mr.Nagaraj - you're absolutely right. Dont need to go too far, just look at the article written by Saba Naqvi in this same issue - 3 out of 10 para's have loose reference to Robert Vadra. Paras 4-10 are dedicated to why the BJP is bad especially Narendra Modi. Her argument is Modi has not raised the Vadra issue during campaigns, and hence he must be getting some quid pro quo as well!
We at Outlookindia.com welcome feedback and your comments, including scathing criticism
1. Scathing, passionate, even angry critiques are welcome, but please do not indulge in abuse and invective. Our Primary concern is to keep the debate civil. We urge our users to try and express their disagreements without being disagreeable. Personal attacks are not welcome. No ad hominem please.
2. Please do not post the same message again and again in the same or different threads
3. Please keep your responses confined to the subject matter of the article you are responding to. Please note that our comments section is not a general free-for-all but for feedback to articles/blogs posted on the site
4. Our endeavour is to keep these forums unmoderated and unexpurgated. But if any of the above three conditions are violated, we reserve the right to delete any comment that we deem objectionable and also to withdraw posting privileges from the abuser. Please also note that hate-speech is punishable by law and in extreme circumstances, we may be forced to take legal action by tracing the IP addresses of the poster.
5. If someone is being abusive or personal, or generally being a troll or a flame-baiter, please do not descend to their level. The best response to such posters is to ignore them and send us a message at Mail AT outlookindia DOT com with the subject header COMPLAINT
6. Please do not copy and paste copyrighted material. If you do think that an article elsewhere has relevance to the point you wish to make, please only quote what is considered fair-use and provide a link to the article under question.
7. There is no particular outlookindia.com line on any subject. The views expressed in our opinion section are those of the author concerned and not that of all of outlookindia.com or all its authors.
8. Please also note that you are solely responsible for the comments posted by you on the site. The comments could be deleted or edited entirely at our discretion if we find them objectionable. However, the mere fact of their existence on our site does not mean that we necessarily approve of their contents. In short, the onus of responsibility for the comments remains solely with the authors thereof. Outlookindia.com or any of its group publications, may, however, retains the right to publish any of these comments, with or without editing, in any medium whatsoever. It is therefore in your own interest to be careful before posting.
9.Outlookindia.com is not responsible in any manner whatsoever for how any search engine -- such as Google, Bing etc -- caches or displays these comments. Please note that you are solely responsible for posting these comments and it is a privilege being granted to our registered users which can be withdrawn in case of abuse. To reiterate:
a. Comments once posted can only be deleted at the discretion of outlookindia.com
b. The comments reflect the views of the authors and not of outlookindia.com
c. outlookindia.com is not responsible in any manner whatsoever for the way search engines cache or display these comments
d. Please therefore take due caution before you post any comments as your words could potentially be used against you
10. We have an online thread for our comments policy:
You are welcome to post your suggestions here or in case you have a specific issue, to directly email us at Mail AT outlookindia DOT com with the subject header COMPLAINT