They say “crony” is the only form of capitalism that works in India. This idea was repeatedly challenged by KP Singh in his autobiography ‘Whatever the odds’ which chronicles the explosive growth of a fledgling property player into India’s biggest real estate company, DLF. He writes about his perseverance despite running foul by a politician, his vision to transform Gurgaon into a boom city, his ‘doing business the hard way’ in a land of archaic laws. There are many more references of his business practices and ethics in the book.

All that came to negative light when anti-corruption activist Arvind Kejriwal alleged in a press conference on 5 October that DLF provided undue favours to Sonia Gandhi’s son in law, Robert Vadra. Kejriwal brought to light a set of documents that reveal that Vadra had received and unsecured interest free loan of Rs. 65 crores from DLF in order to buy plots and apartments at throw away prices from DLF itself.

At that time Kejriwal alleged that there must have been a quid pro quo agreement between Robert Vadra and DLF such that Vadra would have used his influence in the Haryana Government for land acquisition or something. Three days later he stepped up the attack, this time alleging that Haryana government helped DLF  land government plots, illegally raise floor area ratio (a measure of how much construction is allowed on a plot) and convert land meant for hospitals into a special economic zone.

Later what came to light that Haryana IAS officer, Ashok Khemkar cancelled the mutation (change of land use) of a 3.5 acre plot in Gurgaon citing undervaluation of the plot in the deal. Vadra bought this land for Rs. 13 crores (which he got from DLF itself) and after getting its land use changed from Hospital to residential sold it off to DLF for Rs. 58 crores. Not surprisingly land mutation which usually takes 5-6 months, took only one day for Vadra. The IAS officer cited that the land might be sold to DLF but the license to develop it was with Vadra’s company, Skylight Hospitality and hence the transfer of land ought to be cancelled. He came to this conclusion on the grounds that the price paid by DLF to Vadra was almost four times the purchase price, even though two transactions were just three months apart.

The Haryana Congress government however hurriedly issued Khemkar’s transfer order on 11 October and cancelled his order claiming he has been transferred first and his order of cancelling the deal stood cancelled. The Haryana government has set up an inquiry committee to be headed by the additional chief secretary and will have two other senior members of the state government. The inquiry has been ordered to be completed within one month.

The committee will look into the legality of actions taken by officials concerned, including acts of omissions and commissions, if any. “I think we should wait for the committee’s report. We need to investigate the matter carefully,” the chief secretary said. Lawyers who deal in land acquisitions said Khemkar’s order may not be of much consequence.

“In my opinion, this will go through as all agreements (between Vadra and DLF) have been cleared by various government departments over five years,” one of them said, requesting not to be named. But this could change, the lawyers said, if the Haryana government committee unearthed irregularities in Vadra’s dealings.

The Opposition parties slammed the transfer, saying the state led by a Congress government was investigating the actions of what they termed as an honest bureaucrat instead of “corruption charges” against the party president’s son-in-law.

Kejriwal demanded Vadra to be independently probed under the Prevention of Corruption act because of his close relations with 10 Janpath.  However the Congress Party has been fanning out ministers across television channels to Vadra’s defence citing that he is a private citizen, and his business dealings are independent of the party and the government. Law minister Salman Khurshid even swore to lay down his life for the Gandhi family. When it realised the political implication of such high pitched defence it withdrew the ministers quickly. But the damage was done, the equation was set in the public mind, Vadra = Gandhi Family = Congress. Many suggest that Vadra can be under the present law be probed under the prevention of corruption act though he is not a public servant as he owns property in Lodhi Gardens which no private citizen can be awarded.

DLF investors too faced the aftermath of the revelations with having lost  Rs. 6,921 crores since October 5 following allegations that the company has favoured Robert Vadra. Though these charges have been denied by DLF, the credibility of the company and a serious threat of an inquiry could hurt the company further, which has dropped over 17% since the allegations have been made.

Regardless of the veracity, Kejriwal’s allegations are not entirely surprising, given that real estate has long been a fount for corruption. The cosy relationship between builders and politician is well known. Even builders acknowledge that fact that real estate in India has become synonymous with bribes and black money. How so? Thanks to the many rules that govern the sector, real estate has been governed by a patchwork of regulations that promote arbitrariness in doing business and leave plenty of room for offenders. It takes approximately 57 approvals, 172 documents, and 40 municipal, state and central government departments before one can start construction, but most importantly acquiring land which is the most essential constituent of real estate, is complicated because it is in short supply and cannot be obtained without political patronage. This is what Robert  Vadra was used by DLF for, as a broker to get the land use and other formalities get done from the Congress ruled Haryana government.

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