Surprise Surprise : Indian Real Estate Company Emaar MGF implicated in the Massive Commonwealth Scam

Indian Real Estate Companies have the worst reputation amongst the different sectors in India.Corruption,Irregularities,Creative Accounting,Defrauding Consumers,Tax Raids are common to these companies.In fact the financial statements of the Realty Sector are considered so untrustworthy that some Fund Mangers are loath to invest in the whole sector.Despite a Stock Market Bull Run,a line of Realty Companies have not still managed to raise money from the primary markets because of the distrust with which the general public regards them.A Truly Dubious Achievement for the Real Estate Sector in India.Note both small developers and big developers have been involved in scams and shenanigans.2 Real Estate Companies in the National Capital Region Oreo and Emaar MGF,two of the better known Realty Companies have come under the focus of Indian Investigative agencies.Emaar MGF has been trying to do an IPO for a long time without success.Now it has come under the scanner for irregularities for construction of the Commonwealth Games Village.

The Company has to be bailed out by the government as it ran out of funds and now due to irregularities, the company’s Rs 183 bank guarantee has been seized.Not a Real Estate Company you would want to invest in.Oberoi Realty and Prestige Estates have managed to raise money from the IPO market recently.Emaar MGF which is promoted by the UAE giant Emaar would have been hoping to do a similar act.However this recent scam might prove its undoing once again.

Emaar under corruption cloud in Andhra too – India Today

Infrastructure developer Emaar-MGF – in the dock for alleged irregularities in the construction of the Commonwealth Games Village in Delhi – is feeling the heat in Andhra Pradesh, too.The state government is under tremendous pressure from almost all political parties, including a section of the ruling Congress, to blacklist the company for an alleged scam in developing 535 acres of prime land on the outskirts of Hyderabad.

Emaar suffered a further setback when the Andhra Pradesh High Court on Wednesday dismissed its plea to suspend the inquiry by anti-corruption bureau into the land allotment made by the APIIC to the company.

Of this land, 285 acres was sold at a rate of `29 lakh per acre and the remaining was given on lease for a period of 66 years at a nominal rate of 2 per cent of the total revenue made out of the golf course. The original agreement gave the APIIC a 49 per cent stake in the leased land.But subsequently, it was diluted to 26 per cent and later to a meagre 6.5 per cent because of the alleged officialdeveloper collusion. Subsequently, Emaar Properties contracted the entire project to its subsidiary Emaar-MGF. Changes were made in the original agreement to allot 95 per cent revenues to Emaar-MGF.