Plot thickens: Vadra, DLF, and a ‘smoking gun’ of sorts…
by Venky Vembu Oct 10, 2012
With each passing day, the web of intrigue that connectsSonia Gandhi‘s son-in-law Robert Vadra to the business fortunes of real estate developer DLF is being systematically unravelled by anti-corruption activist and newbie politician Arvind Kejriwal. And what Kejriwal has revealed thus far, and in particular at his press conference on Tuesday, provides adequate circumstantial evidence to establish that there is a prima facie case of political influence-peddling in a manner that profited both DLF and Vadra.
Despite the strenuous rebuttals and clarifications offered by DLF, first on Friday (when Kejriwal made his first round of allegations) and then late on Tuesday, the organic links between DLF and Vadra point to a cosy relationship between a leading business house and a political satellite (with enormous clout as a member of the First Family of Indian politics) in a manner that validates long-held perceptions about the politician-builder nexus.
In his first round of allegations on Friday, Kejriwal established that Vadra had been the beneficiary of DLF’s extraordinary largesse – in a way that saw Vadra rise from a middling brassware exporter status to a big-money real estate operator. The documents that Kejriwal ferreted out from the Registrar of Companies in respect of Vadra’s business dealings charted a remarkable business profile. The rocket fuel that propelled Vadra into the high orbit was a series of transactions with DLF. DLF claims these cash infusions were “advances” on land that Vadra’s companies had sold to DLF, but for all practical purposes, as Firstpost had noted earlier, they served as an unsecured, interest-free loan. Vadra leveraged that for extraordinary gains in the real estate market.
Arvind Kejriwal’s revelation on Tuesday offer the nearest thing to a ‘smoking gun’ evidence in the DLF-Vadra affair.
In any case, as Firstpost had noted (and Kejriwal reiterated on Tuesday), there is at least one entry of a loan from DLF Ltd reflected in the balance-sheet of one of Vadra’s companies, which effectively nails DLF’s claim that no loans were ever offered to Vadra’s companies. That discrepancy between DLF’s account and Vadra’s company filings merits investigation.
But even as of Friday, when it was manifestly clear that Vadra had benefited from the business association with DLF, there was one missing piece to the jigsaw puzzle: how did DLF benefit from that investment in Vadra’s political capital? Where was the quid pro quo? In other words, where was the ‘smoking gun’ evidence that establishes criminality arising from that relationship?
Kejriwal’s revelations on Tuesday establish the nearest thing to that ‘smoking gun’ evidence. As Kejriwal mapped out, one strand of Vadra’s business association with DLF binds them organically to a Special Economic Zone (SEZ) project in a manner that could have profited DLF in securing land from the Harayana government. Specifically, for one year between 2008 and 2009, M/s North India IT Parks Ltd, one of a clutch of companies that Vadra incorported in a rush of real-estate entrepreneurship (funded by DLF), acquired a stake of nearly 50 per cent in DLF SEZ Holdings Pvt Ltd, the DLF company that was floated in 2007 to promote the SEZ project.
The relationship itself was short-lived: Vadra’s company sold back its stake in DLF SEZ Holdings to the DLF group. But even so, it is revealing, particularly when one considers the manner in which having a heavyweight political name associated with a project opens doors in government, particularly one headed by the party associated with Vadra.
During the time that Vadra’s company had a stake in DLF SEZ Holdings, the latter was tying up the process of securing land from the the Harayana government for the SEZ project. That land acquisition had been caught up in litigation, since the land had originally been allotted for a hospital.
The precise details of DLF SEZ’s interactions with the Congress government in Harayan, during the time that Vadra’s company had a stake in the SEZ project, are not yet out. But to appreciate how DLF would have benefited from the association with Vadra, you have to understand how the wheels of power spin.
Merely having Robert Vadra‘s name associated with the project would have – as Firstpostnoted here – opened doors for DLF in its interlocutions with the Haryana government. There wouldn’t have been any need even for old-style influence-peddling or for Vadra to make a couple of discreet phone calls to people who were in a position to decide in DLF’s favour. Any politician or bureaucrat in Haryana who saw Vadra’s company had acquired a stake in the SEZ project would, given the culture of dynasty worship that prevails in the Congress, have taken the hint and cleared the files in double-quick time.
For sure, there is as yet no certitude about what precisely transpired. But only the extremely naive would discount the manner in which name-dropping (by showcasing Vadra’s company’s stake in the project) would have greased the tracks for DLF in its interactions with the Haryana government.
In other words, DLF appears to have made an investment in Vadra’s political capital – by offering him interest-free loans and real-estate at a discount, on the strength of which his business soared in just three years. In return, Vadra evidently returned the favour, by formalising a discreet manner in which his interest in DLF projects could be invoked by DLF to advance its own business fortunes.
You scratch my back, I scratch yours. In other words, business as usual…