Mihir S Sharma asks a few questions on l'affaire Vadra, and makes notes on who should answer them and why
Arvind Kejriwal's new allegations against Robert Vadra, DLF, and the Haryana government make for interesting reading. But then, Kejriwal always gives journalists good copy; some might claim it's his only really useful trait.
That doesn't mean that the deals Kejriwal's chosen to highlight aren't interesting in their own way. Essentially there are two: on the DLF SEZ holding company that Vadra bought into, and on the plot of land in Manesar that Vadra sold to DLF -- using the advance on that sale to buy into several DLF properties.
The really interesting thing about the former is that Kejriwal and Prashant Bhushan have laughably chosen to glorify the original use of the land, as a hospital project. Of course, the hospital was being set up by Oberoi Hotels, of all people -- which would lead most outside observers to strongly suspect that East India Hotels, the Oberois' holding company, was using the government's public-purpose clause for private gain.
Indeed, they said they would also set up an institute for hotel-management trainees, and take over a large part for "executives' apartments". The Haryana government wanted this turned into a software SEZ.
The latter is arguably as much a "public purpose" as the former, and no doubtful lobbying process to get the use changed need be imagined. Note also that Kejriwal, typically, did not tell you the complete story -- namely that the high court order on the SEZ he quoted was stayed by the Supreme Court.
The second transaction, of course, appears a straightforward sweetheart deal, in which DLF essentially held Vadra's hand and allowed him to make a ton of money while he felt awfully smart about his business nous. Frankly, we all think real estate works like this anyway -- nobody without connections can make the big money.
Still, there are a few outstanding questions which need answering.
For Robert Vadra
1. Did you think that you were getting deals from DLF that were exceptionally good? Were you suspicious at what you might be asked to do in return?
2. How did you locate the land in Sonepat that you resold to DLF? Did you know in advance that a change-of-land-use notification was imminent?
3. What paperwork did your company file in order to get the CLU notification passed, following which the value of the land increased by over 300 per cent? Did you make any calls or meet any officials in your legitimate effort to have the land rezoned?
4. Why did you sell out of DLF's SEZ holding company? Did you think that Rs 2.5 lakh, what you paid, was a fair valuation of 50 per cent of the company? Did you approach DLF with the deal, or did they approach you?
5. If DLF took possession of the Sonepat land in 2008-09, as they claim, why is it still on your books as an incomplete sale in 2010-11? What is your tax liability on the transaction, and when were you planning to pay it?
6. When did you take possession of the flat in DLF Aralias? When did you pay the full amount of Rs 11 crore?
7. How much did you pay per square foot for your seven flats in DLF Magnolias? DLF says you paid Rs 10,000 per square foot. Your books say you paid a seventh of that. Which is true?
8. How did you convince Corporation Bank to lend Rs 7.94 crore to a company that had Rs 1 lakh in paid-up capital? Did you provide collateral or a personal guarantee? Who in the bank did you or your associates communicate with?
Note: Vadra is not obliged to answer any of these questions, as he holds no position of public trust. (Quite the reverse.) But if he does not answer them, things look bad for his family and their party.
1. Were you aware of the existence of the plot of land in Sonepat which Vadra offered to sell you, before Vadra offered it to you? Before he bought it?
2. How did you value it at Rs 58 crore once its CLU notification came through?
3. Why did you sell 50 pc of your SEZ holding company to Vadra? What does he bring to the table in terms of designing SEZs? How did you value this share at Rs 2.5 lakh?
4. Did you accept payment for the flat in DLF Aralias from Vadra only in two instalments -- first Rs 89 lakh and then Rs 10 crore, after he took possession? Or is this an error in Vadra's books?
5. How many other deals do you have on your books in which over 85 pc of the sale price of land is provided as an advance?
6. What is the current market rate for the Manesar plot? Is it greater than Rs 58 crore? On what basis do you make the calculation that DLF has profited on the deal?
DLF, unlike Vadra, is obliged to answer these questions, as it is a publicly listed company.
For the Haryana government
1. Did anyone in the Haryana government or local administration discuss the use of DLF's SEZs with Vadra at any time? If so, when and why?
2. What was the procedure and reasoning for the change of land use of the Manesar plot owned by Vadra's company? How long was the request pending?
The Haryana government is, of course, supposed to answer questions. Fat chance it will, though.
For Corporation Bank
1. Who took the final decision to lend Vadra's company Rs 7.94 crore on a paid-up capital of Rs 1 lakh?
2. How often does your bank lend a debt-equity ratio of that degree?
3. How often do you fund the entire component of a real-estate transaction?
4. Do you have any other dealings with Vadra? Did anyone communicate with an officer of the bank on his behalf?
5. Would you give me the same terms? (References available on request.) Why not?
Corporation Bank is part of the public sector, and ultimately the property of the citizens of India. As part-owner, I'd like an answer or two.
For Arvind Kejriwal
1. What, precisely, do you think that Robert Vadra did for DLF in order to get these sweetheart deals? Do you not think that his proximity to power was enough to access these deals? If not, why not?
2. What illegal dealings can Vadra or DLF be charged for? Under what statute?
3. You have said there is enough of a case here for an income-tax raid. Can you give an example of a raid conducted with this much evidence? What provisions of the income-tax laws do you think Vadra has violated?
4. Did the DLF SEZ holding company you referenced as part-owned by Vadra, briefly, own shares at the time in the specific DLF SEZ you mentioned?
5. If the DLF SEZs received clearances in 2006 from the Haryana government, and Vadra bought into a holding company in end-2008, how can you claim that he was instrumental in the clearances? DLF in general has no problem getting clearances from the Haryana government. Why do they need Vadra?
6. Why are you claiming that your revelations about Vadra and DLF are new when they were reported by The Economic Times?
7. What responsibility does Vadra have to discuss these allegations, when he holds no public office?
8. Why did you not specify the Supreme Court had stayed the Punjab high court judgment on DLF's SEZs that you had so liberally quoted?
Arvind Kejriwal is now a politician who makes allegations in public. If he respects his credibility, he will answer these questions. Of course, he does not respect his credibility, so most of them will likely go unanswered.
For Sonia Gandhi
1. Were you aware that Robert Vadra was receiving these deals from DLF prior to the ET story?
2. Did Vadra ask for your permission to enter into real-estate trading? Did you approve? Do you approve?
3. Why have you not said on record that nobody in business or government should give Vadra any preferential deals on the expectation of favours from you or your party's governments?
4. Do you approve of the ministers in your party's government clearing Vadra of wrong-doing before any official investigation?
Sonia Gandhi is a member of Parliament and the leader of India's largest party. However, these questions are vaguer and more personal than those directed at everyone else, so she is under no obligation to answer them. But her power and the source of her authority are vaguer and more personal, too, and she should realise that they will erode unless she does.
For everyone else
1. Are you really surprised?
No, don't answer that.