KUMAR ANSHUMAN

Frosting over Robert - By Prabha Jagannathan and Kumar Anshuman Tue Oct 16 11:02:49 GMT 2012 Rumours of shady deals of Robert Vadra, son-in-law of UPA chairperson Sonia Gandhi, had for long been floating around in political circles. But they never appeared in the media—until activist-turned-politician Arvind Kejriwal took him head on. Kejriwal revealed that Vadra had taken an interest-free loan of Rs65 crore from real estate giant DLF to buy properties worth hundreds of crores at prices far below the market rate. Documents presented by him showed that five companies floated by Vadra in or after November 2007 had total share capital of Rs50 lakh. They all had a common address—268, Sukhdev Vihar, New Delhi—and had no visible business activity. Yet, in three years, the companies acquired properties that were worth well over Rs300 crore at the time of acquisitions. “What's interesting is that the seed money for these acquisitions has come from unsecured interest free loans from DLF,” said Kejriwal. “The bulk of properties were purchased from DLF at a rate which was far below the market price.” The documents show that Vadra bought seven flats in DLF Magnolias in Gurgaon for Rs5.2 crore and a 10,000sq.ft penthouse in DLF Aralias in Gurgaon for Rs89 lakh. Also, one of Vadra's companies bought a 50 per cent stake in DLF Hilton Hotel in Saket, Delhi, for Rs31.7 crore. “The market value of this property was well over Rs150 crore,” said Kejriwal. It is alleged that Vadra was given unsecured loans in exchange for political favours. According to Kejriwal, the Congress government in Haryana gave 30 acres meant for the construction of a hospital to DLF for developing a special economic zone—a move that was later reversed by the Punjab and Haryana High Court. It is also alleged that the Haryana government modified the bidding process for the construction of a 350-acre golf course so as to benefit the company. DLF, however, denied the allegations. “We wish to categorically state that DLF has given no unsecured loans to Mr Vadra or any of his companies,” said the company in a statement. “An amount of Rs65 crore was given as business advance for the purchase of land as per standard industry practice.” According to DLF, Vadra purchased apartment in Aralias in September 2008 at Rs12,000 per square foot, which was the prevalent market price then. Vadra, the company said, paid a total of Rs11.90 crore for the apartment. “The allegation that seven apartments in Magnolias were sold for Rs5.2 crore only is also completely baseless,” said a company official. The allegations, however, have done the damage. The share price of DLF, which is already reeling under debt, has started falling. Goldman Sachs has downgraded DLF, advising investors to avoid buying its shares. The Congress, however, is the hardest hit. With Assembly elections looming in Gujarat and Himachal Pradesh, party leaders are struggling to contain the damage. Union Law Minister Salman Khurshid scrambled to Vadra's defence, saying an attack on the integrity of the Gandhi family was an attack on the Congress itself. Finance Minister P. Chidambaram ruled out an inquiry into the issue. “Unless there is a specific allegation of quid pro quo or corruption, private transactions cannot be allowed to be questioned on the basis of imputations and insinuations,” he said. Evidence that Kejriwal's allegations had hit home came on October 5, when Sonia issued a brief statement defending Vadra. “There has been no misuse of the office of the Gandhi family or any misuse by Robert Vadra. Vadra is a businessman. His transactions are transparent and above board,” she said. Vadra, too, maintained that he had done no wrong. “I am a private law-abiding citizen.... My business transactions are fully reflected in financial statements filed before appropriate government authorities in compliance with the law,” he said. Congress spokesperson Rashid Alvi dared Kejriwal to take the matter to court if he had any proof of Vadra's wrongdoing. Said a Congress leader: “If they had proof, the India Against Corruption, which is chock-a-block with PIL lawyers such as Prashant Bhushan, would have gone to court. It is clear that the allegations are baseless. Their aim is to milk the issue for political capital.” Senior lawyer Harish Salve, who has represented DLF in the past, indicated that DLF, Vadra and the Congress might consider suing Kejriwal for defamation. “Allegations have to hold up as evidence in court,” said a senior Supreme Court lawyer. “A quid pro quo between the respective governments and DLF, which has to answer to its shareholders, has to hold up in court. Under the Companies Act, there is no apparent illegality.” Prasanth Bhushan, however, asserted that there was indeed a case against Vadra. “Prima facie, the facts show the commission of offences under the Prevention of Corruption Act as well as the Income Tax Act,” he said. Then why not go to court? “This battle will be fought in the court of the people of this country,” Kejriwal said. He upped the political ante by demanding that the Haryana government issue a white paper on land deals since 2007. He said that he had more exposes up his sleeves to hit the Congress hard. Curiously, the opposition BJP has been soft-pedalling the issue. It reluctantly demanded an inquiry into Vadra's business dealings, fearing that it could prove to be a double-edged sword politically. “The BJP is a responsible political party and we have never taken up charges unless it is backed by strongly documented proof or reports from agencies such as the Comptroller and Auditor General,” said BJP spokesperson Nirmala Sitaraman. The BJP, however, will be hoping to reap the benefits of the controversy in the Assembly elections in Gujarat and Himachal Pradesh. The Congress can do little now, except go on the defensive and work hard to put its big-ticket reforms back in the spotlight. Property listed in the balance sheet of Vadra’s companies * 50 per cent share in DLF Hilton Hotel, Saket, Delhi - Rs31.7 crore * 10,000sq.ft apartment in DLF Aralias, Gurgaon - Rs89 lakh * Seven flats in DLF Magnolia -Rs5.2 crore * One flat in DLF Capital Greens - Rs5 crore * Plot in Greater Kailash II, Delhi - Rs1.2 crore * Land in Bikaner - Rs1.02 crore * Six additional properties in Bikaner - Rs2.43 crore * Land in Manesar, Haryana - Rs15.38 crore * Land in Palwal, Haryana - Rs42 lakh * Two plots in Hayatpur, Gurgaon - Rs4 crore * Six plots in Hassanpur, Haryana - Rs76lakh * Two plots in Mewat, Haryana - Rs95 lakh * Agriculture land in undisclosed location - Rs69 lakh