Guess who paid for Vadra’s Bikaner land? DLF again

The floodgates seem to have opened when it comes to news reporting on Robert Vadra and his real estate dealings. DNA today reported that “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.”


According to the newspaper, “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…These companies together invested Rs2.85 crore in barren land here during this period.”

Vadra bought these plots of land through his companies Sky Light Hospitality Pvt Ltd, Sky Light Realty Pvt Ltd, Real Earth Estates Pvt Ltd, North India IT Park Pvt Ltd and Blue Breeze Trading Pvt Ltd.

The question is where did these companies get the money to buy this land? The one word answer is DLF.

Let’s try and understand this in a little more detail. Take the case of Real Earth Estates. As on 31 March 2010, the company had an issued capital of Rs 10 lakh. This is the money that the owners of the company (Robert and his mother Maureen) had put into the business.

Here is where things get interesting. As on 31 March 2010, the company had 10 plots of lands listed under fixed assets. These plots were bought at a total cost of Rs 7.09 crore. Of these plots three plots were in Bikaner. These plots were bought at a total cost of Rs 1.16 crore. The question is how did a company with an issued capital of Rs 10 lakh buy plots which cost Rs 7.09 crore in total?

The answer is that the company borrowed money. As on 31 March 2010, Real Earth Estates Pvt Ltd had a loan of Rs 5 crore on its books from DLF. Arvind Kejriwal, in his exposure of links between Vadra and DLF, had categorised this to be an unsecured loan.  An unsecured loan is a loan in which the lender does not take any collateral against the loan and relies on the borrower’s promise to return the loan. Over and above this, a Rs 2 crore loan came from Sky Light Hospitality Pvt Ltd, another Vadra company.

So this money was used to buy 10 land plots in total and three in Bikaner. Let’s dig a little more on how Sky Light Hospitality managed to give a Rs 2 crore loan to Real Earth Estates. As on 31 March 2010, Sky Light Hospitality had an issued capital of Rs 5 lakh.  So how did company with a capital of Rs 5 lakh manage to give a loan of Rs 2 crore to another company?

This is where DLF again comes into the picture. The company had given Vadra’s Sky Light Hospitality an advance of Rs 50 crore. DLF had said in an earlier statement that “Skylight Hospitality Pvt Ltd approached us in FY 2008-09 to sell a piece of land measuring approximately 3.5 acres…DLF agreed to buy the said plot, given its licensing status and its attractiveness as a business proposition for a total consideration of Rs 58 crore. As per normal commercial practice, the possession of the said plot was taken over by DLF in FY 2008-09 itself and a total sum of Rs 50 crore given as advance in instalments against the purchase consideration.”

The first instalment of the advance paid to Vadra was paid on 3 June 2008, but the sale deed of this land was registered only on 18 September 2012,  The Hindu pointed out a a few days back. What this meant was that the advance stayed with Vadra’s Sky Light Hospitality for more than three years. An advance, unlike a loan, is made interest-free for a short period of time.

Vadra had access to a part of the Rs 50 crore advance for a period of more than four years, given that the first instalment was paid in June 2008. And he had access to the entire advance of Rs 50 crore for greater than three years, given that the sale deed was registered only last month.

DLF refers to giving advances as normal commercial practice. But the question that crops up here is whether it is regular practice for the company to give advances for such long periods of time? “DLF has not been able to cite other instances of where interest-free advances have been given, and over such long periods of time,” wrote the Financial Express a few days back.


This Rs 50 crore was at the heart of Vadra’s operation and was used by him to buy land as well as flats. Rs 2 crore out of this Rs 50 crore available with Sky Light Hospitality was used to give a loan to Real Earth Estates Pvt Ltd. Effectively DLF gave money amounting to Rs 7 crore to Real Earth Estates Pvt Ltd to buy land. Of this Rs 1.16 crore was used to buy land in Bikaner.

Sky Light Hospitality bought land in Bikaner on its own account as well. The balance-sheet of the company as on 31 March 2010, shows a plot of agricultural land worth Rs 79.56 lakh in Bikaner. It need not be said this was financed from the Rs 50 crore so called advance received from DLF.

Now let’s turn our attention to North India IT Parks Pvt Ltd. The balance-sheet of the company as on 31 March 2010, shows two entries under fixed assets. The first entry is 85.62 acres of agricultural land bought at Rs 48.78 lakh. Another entry is for 75 acres of land in Bikaner bought at Rs 53.32 lakh. This means the total cost of land bought by the company in Bikaner was around Rs 1.02 crore. Interestingly the company has an issued capital of Rs 25 lakh. So how did a company with an issued capital of Rs 25 lakh manage to buy land which cost over Rs 1 crore?


It got loans from other Vadra companies. There is a loan of Rs 10 lakh that was made by Sky Light Hospitality. This, of course, came out of the Rs 50 crore advance that DLF gave Sky Light. Then there is a loan of Rs 55 lakh that came from Real Earth Estates Pvt Ltd, which in turn had a loan of Rs 89.5 lakh from Blue Breeze Trading Pvt Ltd, another Vadra company.

Where did Blue Breeze, which has an issued capital of Rs 5 lakh, get Rs 89 lakh to loan? This writer has been unable to establish. North India IT Parks Pvt Ltd had another direct loan of Rs 38 lakh from Blue Breeze Trading Pvt Ltd. Blue Breeze Trading, as on 31 March 2010, had total current liabilities amounting to Rs 2.86 crore.

So all in all this makes it clear that unless DLF had given Vadra a so called Rs 50 crore advance and a Rs 5 crore loan he wouldn’t have been able to go on his property buying spree in Bikaner. DLF is the source of almost all of Vadra’s real estate gains.