Last July (2012)
month, more than a 12 investors dragged DLF Ltd
to court, accusing it of hurting their investments in an east Delhi mall
by converting it into an office complex.
A year after the CCI,
in a landmark judgment, slapped DLF Ltd with a Rs. 630 crore anti competition
fine, which the DLF Ltdcompany is contesting in a higher body—more such cases
are piling up against the developer for a wide range of unfair business
practices.
Nothing more than a
concrete structure..!
In 2005, partly lured
by the hype of modern retailing that was touted as the next sunrise sector
& party enticed by the rosy picture painted by DLF Ltd, Mr.Naveen Aggarwal
invested Rs. 1 crore in buying shops at an upcoming mall in Delhi's Mayur
Vihar.
Finally, after years
of delay, when the DLF Galleria mall was ready to be opened, the slowdown hit
the retailing business. As a result, DLF Ltd could not find appropriate tenants
for the building, and it leased the space as office. This is now being objected
to by the investors who had bought shops there.
Mr. Naveen Aggarwal
said, "After 5 years of wait, there was no anchor tenant, no foodcourt as
promised. DLF Ltd had promised supermarket Sabka Bazaar as the lead retailer in
the mall. It was nothing more than a concrete structure & we could not find
tenants because of that"
Now, Mr. Naveen
Aggarwal along with 56 other investors, who bought outlets of various sizes,
have dragged DLF Ltd to court, accusing the India's largest developer for
converting a mall into an office complex.
Mall of India..!
Mr. Rajeev Talwar,
Group Executive Director, DLF Ltd said,''It is a reality today that many of the
retail projects did not take off due to tough economic conditions post the 2008
downturn. For example, DLF Ltd's plans to construct India's biggest mall in
Gurgaon, The Mall of India, has been postponed any times due to the prevailing
slump".
The buyers of DLF
Galleria, he says, need to lease their space on their own and stop blaming DLF
Ltf. "We are trying to find an anchor tenant & other retailers but the
market is tough. We are exploring how to maximise footfalls into the
mall." he adds.
In another case, DLF
Ltd had sold offices at Okhla in Delhi to investors in 2008 on the promise that
the land use will be changed from industrial to commercial. The DLF Ltd even
promised to return the money to investors with interest if it was unable to
change land use in one year (12 months).
Meanwhile, DLF Ltd is
targeting to raise about Rs. 3,000 crore from sale of its 17.5 acre prime land
in Mumbai and the deal is expected to close this quarter.
DLF Ltd had bought
this land in 2005 from the National Textile Mills for about Rs. 700 crore. It
now wants to sell the land as part of its strategy to divest non-core assets to
reduce its whopping debt of Rs. 22,725 crore.
Mr. Rajeev Talwar
“From the Mumbai deal, we are aiming to raise around Rs 3,000 crore. The deal
will be finalised within this quarter,”
In the last couple of
years, DLF has raised Rs 4,844 crore from sale of non-core assets, which
included hotel plots and IT Park / SEZs.
DLF has put its
luxury hospitality chain Amanresorts, wind energy and a huge land holding in
Mumbai on the block as part of its plans to exit from non-core ventures &
focus only on the property business. It expects to raise nearly Rs. 2,000 crore
from Amanresorts & Rs. 1,000 crore from wind energy.
Recently, DLF Ltd had
said the company plans to cut its debt to nearly Rs. 17,000 crore in this
fiscal (2012-13) while asserting that it was not unduly “perturbed” by the
massive debt.
“We are not unduly
perturbed by the debt. We have annual rental income of Rs. 1,800 crore from a
leasing portfolio of 2.8 crore square feet of office & retail space across
pan India,” Talwar had said.
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