Tuesday, October 09, 2012

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.