Real estate giant DLF group confirmed that it ran multiple companies from a dilapidated building in the Jhandewalan area of New Delhi - as revealed by DNA in a recent report. "The company has a large number of subsidiaries, given the nature of the industry," the company stated in a response to queries from DNA.
The real estate major said it had only 80 subsidiaries registered at the 1-E Jhandewalan, New Delhi, address as on March 2015. The company, however, disowned the other 388 companies which were also listed at the same address, even though these were involved in real estate-related businesses.
On August 31, quoting Ministry of Corporate Affairs' (MCA) master data, DNA reported that in 2015 a total of 468 companies were registered at the Jhandewalan address, also known as Naaz Cinema Complex (shares the boundary with income tax investigation headquarters). But post demonetisation, the number of companies got reduced to 245 (MCA data as on December 31, 2016). Not just the physical address, 111 of the 245 companies even shared a single email address. DLF, however, maintains that it had shifted some of its companies to other addresses, but it was not because of demonetisation.
Data-mining by DNA revealed that some directors of these companies registered at Jhandewalan were common across more than 20 companies, which is illegal as per the New Company Act 2013. For instance, directors of Swarnavo Builders & Developers Private Limited's were holding the same position in more than 50 companies located in the same address. According to MCA data, Ramchandra Prasad Sah, one of the directors of Swarnavo Builders, holds directorships in 77 companies, including DLF New Gurgaon Offices Developers Private Limited.
Most of these 77 firms shared the Jhandewalan address.
Six boards placed at the gate of Naaz Cinema complex display a list of more than 200 companies till August 2017, some blacked out with paint recently.
The Supreme Court-constituted Special Investigation Team (SIT) on black money has recommended in its third report, released in 2015, that multiple companies registered at one address, one individual holding directorships in more than 20 companies are some of key indicators for shell companies.
DLF response to DNA
The company has a large number of subsidiaries, given the nature of the industry. All the subsidiaries are duly reported. We wish to clarify that as of 31.3.15, we had only 130 subsidiaries, of which 80 were registered at the address mentioned in your query.
This address used to house our Accounting/Tax and Secretarial functions. Subsequently, due to a planned process and given the business scenario, the number of entities has been reduced to 114 subsidiaries, of which 68 were registered in the address as of 30.06.2016. This figure was 109 as on 31.3.2017, out of which 62 are registered at the said address as mentioned.
We wish to categorically state that the reduction of entities has happened due to general corporate direction and the event of demonetization had absolutely no role to play in the same. All of our subsidiaries are entities with specific business objectives and are fully compliant with all regulations as applicable."
