JLLM touting growth in IT industry

Realty firms under scanner for slush funds

Just what the doctor ordered. An anema of of the entire money laundering system. Ironically DLF and others will have Modi to blame for all the attention. If the heat turns on, new funds will be very afraid to enter the market. Expect the bubble to pop in the foreseeable future.

Economic times reports

NEW DELHI: Major realty firms of the country are under the probe of enforcement agencies for alleged violation of FDI terms and use of slush funds worth several thousand crore brought in from certain tax havens.

While the Enforcement Directorate has carried out raids at premises of realty firm Emaar MGF for alleged violations of Foreign Exchange Management Act in the recent past, the latest to feel the ED heat was realty fund and developer IREO.

Sources said more number of firms are under the scanner and a detailed probe is underway. The Income Tax department has also conducted its operations and is now planning to delve deep into the tax statement of the realty firms.

When contacted, IREO had said "Some officials from the department of revenue have approached IREO for certain information and clarifications, which are being duly responded to. IREO remains committed to fully cooperate with the authorities, like always."

Incidentally, the moves come following a report prepared by an arm of the Revenue Department late last year, which identified the real estate market as the sector having the highest percentage of black money.

The most common violation that the investigating agencies have found in the realty sector is the alleged breach of Foreign Direct Investment terms.

They said many firms are believed to have diverted investments meant for the real estate sector to purchase agricultural land.

Under various agreements with the Foreign investment Promotion Board (FIPB), agricultural land is a sector barred for investment.

The searches that have been initiated now by the ED are the culmination of months of discreet probe into the real estate sector by various arms of the Revenue Department.

They said many of the funds are being brought in from tax havens like the Caymen Islands, Mauritius among others.

In some cases, the Directorate has learnt that certain realty firms had opened up multiple companies to acquire more land than the prescribed ceiling and had even made their low level employees as its Directors without their knowledge.

Freedom at Midnight

On August 15th 1947 as the clock stuck twelve a.m Jawaharlal Nehru made a powerful speech exhorting India to wake up to the new world.

To quote Nehru said "At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long supressed, finds utterance. It is fitting that at this solemn moment we take the pledge of dedication to the service of Inida and her people and to the still larger cause of humanity."

On similar lines in the wee hours of April 26th, 2010, BCCI suspended Lalit Modi thereby singling out Modi as the single individual responsible for all the scandals which IPL is a part of.

On one day India attained freedom, on another the party of the powerful have tried their best to severe off their right hand hoping that this surgical procedure will be the best option under the given circumstances.

Everybody knows the levels of corruption in Indian politics and business. As followers of real estate we have seen massive amounts of speculative capital being parked in lands all over the country. There is no accountability since the law-makers and law enforcers are in cahoots with each other.

This is the India we awake to every day. The sooner we realize it the better it is. It is not going to get any better. Modi was made the scrape-goat since he got too big for his own shoes. The Indian political system operates at more nefarious level then even the Bhai's. I have no sympathy for Modi however I am convinced that he people against him are 10x more deep in the muck which Modi finds himself in.

Now imagine if a commission was setup to examine the land-holdings and source of funds of the builders.

That scandal will make Lalit Modi look like King Harishchandra.