Vadra bubble in Bikaner too. land prices jump 40 times

No one can make up these stories. Truth is stranger then fiction. Here is another article on how land prices in Bikaner a medium sized town in Rajasthan jumped 40 times after Robert Vadra started his investments. It looks like Robert is responsible for the misery of Indian's when it comes to housing.

DNA report is below. Full article is here

In a flurry of deals between June 2009 and August 2011, Robert Vadra purchased at least 20 plots of land collectively measuring more than 770 hectares in Rajasthan’s Bikaner district, in a region that would see prices spiraling soon after.

A clutch of investors, including Vadra, apparently privy to information on upcoming industrial projects in the vicinity, reaped huge profits with land values appreciating by up to 40 times since 2009.

Click here to read the list of plots

Data from the office of the registrar in Bikaner shows 20 properties Vadra purchased through companies, including Real Earth Estates Pvt Ltd, North India IT Park Pvt Ltd, and Skylight Realty Pvt Ltd. All the deals were executed on his behalf by Mahesh Nagar, brother of Haryana Pradesh Congress Committee member Lalit Nagar. These companies together invested Rs2.85 crore in barren land here during this period.

“Vadra clearly misused his position as the son-in-law of Sonia Gandhi,” said Devi Singh Bhati, six-time MLA of the Kolayat tehsil where most of the Bikaner deals took place. “The land was purchased either in the knowledge that industrial projects would be announced, or circumstances were created to bring projects to the area.”

Vadra and cronies to blame for India's housing bubble.

Economic times writes here on Robert Vadra's role in inflating India's housing bubble. Looking at the data we can safely conclude that India's housing bubble is been inflated beyond limits by politicians and their black money dealings with builders with tacit support of public sector banks. The property flippers and NRI's are just pawns in this real game where the biggest transfer of wealth and land to politicians has been done in broad daylight with everyone from the law enforcement and the fourth estate turning a blind eye to this mega scam of massive proportions. NREGA and all schemes for the poor of the country are just eyewash to win votes so these greedy politicians can accumulate wealth which can be measured in astronomical units.



During 2009 and 2010, Vadra bought 25 apartments in DLF Capital Greens, a premium project constructed on a 38-acre land that DLF acquired from DCM Shriram and the Lohia Group in 2007 for Rs 1,675 crore. While the builder launched the first phase of the project at around Rs 4,500-5,500 per sq ft, the prices subsequently increased to Rs 10,000 per sq ft. Vadra brought these apartments in the first phase and sold them in 2010-11.

He also booked 15 apartments in DLF Magnolias, a premium project next to a company-owned golf course on the Gurgaon Golf Course road that is nearing completion. Of these, he has already sold 13 apartments and still retains two units.

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Here is the summary of Shriram Subramanium on investing in real estate stocks. Full article here.

The ongoing DLF  - Vadra controversy has brought to light the blatant transgressions that real estate companies - listed and un-listed - adopt in India. Real estate companies have never been known to be high on transparency and corporate governance. This is just a reflection of the deeper morass in the real estate sector, which is by far the largest and most valuable asset class in India. It is not the marketplace that decides the fortunes of real estate companies, but the builder-politician nexus that picks out the winners in this sector.

Realty sector shouldn’t be listed as the companies don’t need shareholder funds, nor will they ever make any money for investors. 

This is because:

(a)   The sector depends a lot on black money.

(b)   There is little transparency in land values or construction costs.

(c)    Politicians and bureaucrats have lot of discretionary power in deciding winners and losers.

(d)   Companies need to pay speed money to get all approvals for all stages of project development.

Robert Vadra mass-booked and traded DLF flats, but all above board, say DLF sources

Amazing round-trip trades made by Vadra to make record profits.  It is an absolute travesty of all laws where public companies give loans to individuals who then use the loans to buy flats from the same company and then after some time sell the flats to same company at records profits. Now we can see how the housing bubble has been inflated on profits which have been generated out of thin air

Balance Sheet of Vadra

Paidup capital = Rs 0

DLF unsecured interest free loan to Vadra, call this X
Vadra buys flats from DLF with the loan X
Vadra sells the flats back to DLF for amount Y
Profit = Y-X
% profit = Y-X/Input cost = Y-X/0 = Infinity.

A record profit which can only be generated in a banana republic

NDTV has an explosive article here

Bloomberg has an article which lists him having acquired 31 flats in DLF. Now the modus operandi of politicians and builders is very clear. Builders use connections to high profile politicians to avoid income tax scrutiny for their dubious deals. Politicians or their family members rake astronomical profits by capital appreciation from acquiring undervalued properties from the builder and disposing them back to the same builder at market rates. In the meantime the mango people have to borrow at record high interest rates thinking they will be priced out if they don't buy their dream home. As influential columnists are calling this a tip of the iceberg, I wonder how many skeletons are stacked in  the closets of all the 31 flats of Mr Vadra and thousands of others who are in the process of being exposed.

Robert Vadra's alleged flat in DLF Aralias

I did some googling go locate DLF Aralias where Arvind Kejriwal has alleged that Robert Vadra owns several flats. CommonFloor.com has one 5500 sq ft apartment for sale for 19.5 crores. If he own's 7 flats here, Vadra just has a paltry investment of 140 crores. It is also alleged now that several Congress , BJP and JD(U) MP's own super sized penthouses in this building. It is also no surprise that DLF has given these flats to these individuals at huge discounts to the existing prices. Apart from the middle-class in Delhi who can afford these flats is anybody's guess. Here is the link to the advertisement, probably owned by some politically connected individual.

In a very charitable move DLF loans crores of rupees, interest free to Mr Vadra who then buys DLF's properties at throwaway discounted prices. I wish DLF is charitable to every Indian. Every Indian will be indebted to them for the rest of their lives. In fact the Income Tax and company affairs board should make it legal for builders to make unsecured interest free loans to the Indian citizens so they can buy their properties. This will boost their bottomline and they can recognize revenue for the flats which are sold and thereby boost their stock prices. In all seriousness SEBI would need to question the auditor of DLF to explain the fudging of the books. The "Too Big to Fail" individuals are now facing their moment of reckoning.