Tuesday, 29 September 2015

Exposed: How Estate Agents make false claims to trap societies going for redevelopment

What Fresh Documents & Videos reveal about the Concrete Sire Sukan scam – part 1

Mumbai, October 1, 2015:  Mumbai is full of redevelopment activity that feels less like an honest business, and more like hostile takeover or creeping acquisition of flat-owners' assets. Cooperative housing society members who are at the receiving end of  such takeovers should read this article to understand how exactly this activity is carried out. Interesting documents and videos have been released by the motley bunch of builders and estate agents engaged in a hostile takeover of Shree Gurukrupa Nagar Cooperative Housing Society in Mulund West. In late 2013 or early 2014, Bharat Talesara alias Jain, an estate agent or “redevelopment consultant”, approached the office bearers of Shree Gurukrupa Nagar CHS and convinced them to let him handle their redevelopment. The office-bearers agreed to rig the society's tendering process and select him. To facilitate this rigging, Atul Mehta (B.E. Civil), was engaged as Project Management Consultant (PMC). The office-bearers and the PMC together convinced the society members that issuing advertisements and attracting bids through public tendering may attract underworld elements, and therefore, “private tendering” was the way forward. This stage-managed tender got only three bids, including Bharat Talesara's partnership firm called “Sire Sukan Realty”, which supposedly belonged to “Group of Sire Sukan Companies”. As pre-decided, the PMC recommended Sire Sukan Realty. Bharat Talesara went on to sell the redevelopment project to another entity called Concrete Group, belonging to Anuj Desai and Nilesh Dalal, in return for a nine percent share of profits. 

And what is Bharat Talesara's standing? Let us see. In May 2014, he claimed before the society that he was the founder-promoter of Sire Sukan Group whose turnover is currently Rs 200 crore, after six years in the real estate business. But in April 2015, he wrote to the police, "I have been in the business of redevelopment consultancy since 1 year by name Sire Sukan Group of Company, and working for Developer as well as Old Societies". In this same letter, he goes on to repeatedly say that he is only a consultant working for builders, struggling to make ends meet and support his family. 

Clearly, the housing society's sovereign right to select a redeveloper on the basis of merit was hijacked by an estate agent or middleman of little or no net worth, and zero experience in redevelopment. And 72 flat owners, who trusted their society's office bearers, are the sheep being led to the slaughterhouse. The funny thing is that most of these flat-owners still have absolutely no idea about what is happening, and they refuse to believe that they are being made into bakras! The financial and legal illiteracy of housing society members in general is quite astonishing. 

On September 8, we broke this story (http://bit.ly/1QENkXI ) about the modus operandi of this hijack of a society's development rights by “Concrete Sire Sukan”, a bunch of estate agents and builders. Nettled, Concrete Sire Sukan responded with an article on September 14 (http://bit.ly/1KJodQ4 ) which has today been deleted. However, you may download copies of the article from here http://bit.ly/1JEZuL1  

Rather than defending, however, this article actually gives more details about how the fraud is being committed, not only by these builders, but by large numbers of builders and estate agents in Mumbai and other parts of Maharashtra.

This article written by the builders purports to be an open letter written by 65 society members, published on a social media platform called Saddahaq. It is full of links to videos and documents, which are a bit hard to download. It's easier to download them from http://bit.ly/1LddMK0 .

STORY OF THE SOCIETY'S 'CREEPING ACQUISITION': 

1) Estate agent makes underhand deal with society office-bearers and PMC, who portrays estate agent as a successful builder and selects him as the redeveloper: The PMC, Atul Mehta, recommended Sire Sukan Realty by falsely reporting that he and other society members had visited a building that was successfully redeveloped by Siresukan Realty. Actually, the redeveloped building in Bhandup that they visited was made by Varasiddhi Group, not Sire Sukan. (Sire Sukan falsely claims that Varasiddhi is a group company belonging to Sire Sukan.) The PMC falsely reported that he had studied the financial position and technical capability of Sire Sukan Realty and found it strong, whereas the fact is that Sire Sukan Realty has no financial documents to speak of. The addresses of Sire Sukan Realty given in the letterhead, viz. “201 Dimple Arcade, Thakur Complex, Kandivali East”, and also, “501, Dimple Arcade” are also fake; they are tiny shops in a shopping arcade where nobody seems to have heard of Mr Bharat Talesara/Jain or Siresukan Realty. PMC Atul Mehta, society chairman Anil Shah and Secretary Sanjay Jadhav went through the motions of complying with the Maharashtra Cooperation Department's 79A Guidelines, slipperily conducted the necessary meetings, passed the necessary resolutions virtually unopposed, and got the unquestioning society members to sign on the dotted line. Although a few members got suspicious and started raising an alarm, they were repeatedly brushed aside and evaded. 

2) Estate agent sells captured redevelopment project to builders who offer maximum kickback:   After canvassing with various builders, trying to sell this project which was pending some paperwork, but already in his bag, Talesara struck a deal with Anuj Desai and Nilesh Dalal of Concrete Group, in return for nine percent share in profits. 

3) Estate agent and builders enter into partnership and get firm registered after getting contract. Maharashtra Cooperation Department gave this horse-trading a stamp of legitimacy by giving the 79A certificate to Concrete Siresukan Realty LLP on June 20, 2014; needless to say, palms were greased. Concrete Siresukan Realty LLP did not even exist on a letterhead, let alone as a legal entity. Not a single letter had been written to the society by this LLP firm, or by its owners Anuj Desai and Nilesh Dalal. Concrete Siresukan Realty LLP came into existence on 14th July, 2014. The incorporation documents of this Limited Liability Partnership firm reveal the details of the deal: 100% financial control rests with Anuj Desai and Nilesh Dalal, and a 9% share in profits is allocated to Bharat Talesara, who is a partner only in lieu of capturing passing on the development rights of Shree Gurukrupa Nagar CHS. Bharat Talesara has zero financial contribution in the LLP form, and therefore, he has no signing  authority or spending authority.

4) Estate agent hands over to builders. In January 2015, only Anuj Desai and Nilesh Dalal signed the Development Agreement with the society. Bharat Talesara was now out officially out of the picture. But he continues to make his presence felt at the society's redevelopment-related general-body meetings is to ensure that the deal does not come unraveled in his absence. After all, he still has to collect his nine percent from the builders, and they are not going to give it to him until they realize their money first! 

With the signing of the Development agreement, the transfer was complete. The 72 flats of Shree Gurukrupa Nagar CHS, together with the plot of land that the society was owner and possessor of, was neatly bundled up and converted into an asset that Anuj Desai and Nilesh Dalal could enjoy and extract profits from.


WHAT DO SIRE SUKAN'S DOCUMENTS & VIDEOS SHOW?

There are many exhibits that have emerged from the article posted by the builders on Saddahaq.com. Here, we will focus on just a couple of them. At the crucial Special General Body meeting on 24th May, when Siresukan Realty was selected by the society members, a powerpoint presentation was made by Bharat Talesara about “Siresukan Group”. This is a video of that presentation that Mr Talesara has released as part of his article: http://tinyurl.com/Siresukan-Realty-PPT-video . Below are some screen-grabs from this video:

1) Suresukan “Group Companies” are just false claims:
Image: http://bit.ly/1KKhFTs


This slide falsely claims that all the above entities belong to Siresukan Group of Companies.

a) There is no such registered entity as SireSukan Capital Venture.

b) Ditto Siresukan Infrastructures LLP.  It does not exist.

c) Varasiddhi Infrastructure Pvt Ltd is an entirely separate entity, belonging to another group of builders. Details of this entity are here: http://tinyurl.com/Varasiddhi

d) Siresukan Capital Advisory & Infrastructures Pvt. Ltd. is the only real “Siresukan” entity.

e) Concrete Lifestyle & Infrastructure Pvt. Ltd. is a completely separate entity, owned and controlled 100% by Anuj Desai and Nilesh Dalal. It is the flagship company of Concrete Group.

f) Most significantly, there is no entity called “Sire Sukan Realty” named here, although all  the correspondence with the society was done in this name.


2) Siresukan “group” definition itself shows the false claim.
Image: http://bit.ly/1LOhiZY


Siresukan Group (including Varasiddhi and Concrete companies) is supposed to have been founded by Bharat Jain. Untrue. Neither Varasiddhi and Concrete were not founded by Bharat Jain, and most of the other entities named in this powerpoint presentation simply don't exist. They are just imaginary names on a slide.


3) Fraudulent claim of turnover of more than Rs 200 crore in six-year-old business concern.
Fraudulent claim of turnover of more than Rs 200 crore in six-year-old business concern.
Image: http://bit.ly/1P4ZYRH


There are many evidences that the so-called Sire Sukan Group is just a front, and Bharat Sukanraj Jain alias Talesara is nothing but an over-ambitious estate agent. Shown below is his own statement to the police, where he admits that he is in the business of “Redevelopment Consultancy”.  "I have been in the business of redevelopment consultancy since 1 year by name Sire Sukan Group of Company, and working for Developer as well as Old Societies," Bharat Jain wrote in this letter to the police six months ago, on 15/04/2015“Dear Sir, I am just a consultant and I earn very hard to fulfill my family's primary needs”, he added.

Read Bharat Jain's statement below:


There are many evidences that the so-called Sire Sukan Group is just a front, and Bharat Sukanraj Jain alias Talesara is nothing but an over-ambitious estate agent. Shown below is his own statement to the police, where he admits that he is in the business of “Redevelopment Consultancy”.  "I have been in the business of redevelopment consultancy since 1 year by name Sire Sukan Group of Company, and working for Developer as well as Old Societies," Bharat Jain wrote in this letter to the police six months ago, on 15/04/2015. “Dear Sir, I am just a consultant and I earn very hard to fulfill my family's primary needs”, he added.
Image: http://bit.ly/1LOhrNa


In other words, Bharat Talesara's claims of being a big builder, and the promoter of a huge group of companies worth Rs 200 crore doing business for six years, are totally fraudulent. It is a false claim, which the Project Management Consultant Mr Atul Mehta, and the society's office bearers have supported and upheld for corrupt reasons. Officials of the Maharashtra Cooperation Department and BMC's Building Proposal Department also appear to be complicit in this white-collar crime.

Conclusion: Unlike hostile takeover of companies (which became rare after the government tightened the screws on creeping acquisition of shares), hostile takeover and creeping acquisition of flat-owners' assets is a rampant malpractice in Mumbai region. Shoddy regulatory oversight by the cooperation department, municipal corporations and other authorities enables builders to take over common people's flats by hook or crook. The financial illiteracy of flat-owners and society office-bearers and the willingness of office-bearers and project management consultants (PMCs) to ally with builders, makes “society acquisition” and “redevelopment consultancy” a lucrative business. Even a powerpoint presentation full of false claims is enough to convince a society member that the person doing the takeover is a big builder. Office-bearers and PMC play their role by nodding their heads and claim to have seen the necessary documents. Until the government takes cognizance of such tactics and sets up a government body specifically for overseeing redevelopment projects, flat-owners will continue to be taken for a ride.

There are many more elements of this fraudulent redevelopment project, which we will expose in press releases that we shall release now in quick succession.

What the other side said: A draft of this press release was emailed to the builders and PMC, with a request to provide their rebuttal supported with documents. Here is their response: http://tinyurl.com/Concrete-Group-Rebuttal1

Issued in Public Interest by
Krishnaraj Rao
9821588114
krish.kkphoto@gmail.com

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