Cobrapost (New Delhi): Analysis of statutory filings, including annual reports, and relevant MCArecords reveals that DLF Limited helped three members of the Chaurasia clan of the Kamla Pasand Group rake in Rs. 52.45 crore. This fortune came rolling to them on a platter out of a deposit of Rs. 10 crore they had put in the real estate behemoth supposedly for buying some plots of land. It appears that for this fortune to materialize in just under four years, an elaborate schematic was put in place for it. First, a shell entity going by the name of Blossom Farming Estates LLP was set up by Ayushi Chaurasia, Vijay Anand Chaurasia, and Mayank Chaurasia in February 2016. Second, within three months, all three kin and their uncle Anand Kumar Chaurasia put in Rs. 15.11 crore into the entity. Third, Rs. 10 crore was deposited with DLF Limited for the purchase of plots. Six MOUs were signed with six DLF entities for the express purpose of investment, including DLF Limited, the flagship of the group. But no sale deed was ever executed and no property was transferred to the Chaurasia-owned entity. Three years later, these DLF entities paid a compensation of Rs. 52.45 crore, over and above Rs. 10 crore initially deposited.

On the surface nobody would find anything wrong and they would sure say there is no hanky-panky. Just scratch the surface a little and how this fortune was made becomes clear. Not a single sale deed was registered and no property was transferred, even though we learn that the DLF entities signed the MoU cancellation deed to pay Rs. 62.45 crore. Surprisingly, the compensation was entered into the books as 'professional fees' by the paying DLF entities. Soon after the compensation was paid, DLF Limited wiped out these related entities from its records through merger and demerger.

A familiar playbook that, in Cobrapost's experience, big corporates use to cover such questionable transactions.

Cobrapost analysis led to several startling findings which are summed up as follows:

1. Ayushi Chaurasia, Vijay Anand Chaurasia, and Mayank Chaurasia set up Blossom Farming Estates LLP. A total of Rs. 15.11 crore was pooled into the entity.
2. Blossom Farming Estates LLP entered into a series of MoUs to purchase plots of land from DLF Limited and five of its subsidiaries – DLF Property Developers, DLF Real Estate Builders, DLF Residential Partners, DLF Residential Developers, and DLF Utilities Limited.
3. The Chaurasias created security deposits worth Rs. 10 crore for the purpose.
4. Three years later, Blossom Farming Estates LLP was paid Rs. 52.45 crore, more than five-fold return on an investment of Rs. 10 crore, in under four years in FY 2019–20.
5. Not a single sale deed was registered. No property was transferred in the name of the buyer, either, even though DLF entities signed a deed of cancellation to annul the MoUs before the total sum of Rs. 62.45 crore was paid to the entity.
6. It is apparent that the arrangement existed only on paper.
7. DLF Limited and its related entities made payouts below the threshold of material transactions – ranging from the lowest of Rs. 3.44 crore by DLF Utilities Limited to the highest Rs. 13.64 crore by DLF Limited.
8. Surprisingly, the compensation paid to Blossom Farming Estates LLP was entered into the books by the paying DLF entities as 'professional fees'
9. Sometime after making the payouts, DLF Limited moved to merge or restructure the sister entities involved, making the payments far harder to trace.
10. The architecture of the deal — a five-fold 'compensation' on cancelled MOUs, split six ways and routed through a one-event farming LLP — raises the question whether it amounts to an 'impermissible avoidance arrangement' under the General Anti-Avoidance Rules (GAAR) of the Income-tax Act, in force since assessment year 2018-19.
11. Among all the three partners of Blossom Farming Estates LLP, Ayushi Chaurasia walked away with a lion's share of the compensation.
12. Ayushi went on a foreign currency buying spree the same year as the compensation materialized. Beginning in 2019-20, the foreign currency purchases and remittances amounted to about Rs. 30.47 crore by 2024-25.
13. Strangely, Ayushi began making statutory filings as a non-resident from assessment year 2023-24, backed by a United Arab Emirates Tax Residency Certificate and a Za'abeel, Dubai address.
14. Ayushi also declared short-term capital gains of Rs. 12.05 crore in assessment year 2016-17 on consideration of about Rs. 13.99 crore against a cost of about Rs. 1.95 crore. By 2020–21, she held a securities portfolio of Rs. 58.80 crore, which later peaked to Rs. 78 crore.

The manner in which DLF Limited and five of its sister entities paid the Chaurasia farming LLP an unjustifiable compensation of Rs. 52.45 crore and then wiped the entities involved out of existence needs to be investigated for violation of SEBI's LODR Regulations and the Companies Act 2013. The foreign currency transactions of Ayushi Chaurasia appear to violate certain provisions of the Foreign Exchange Management Act (FEMA). A non-resident is expressly barred from investing in any entity that is engaged in agriculture. As the Chaurasia's entity's name suggests, Blossom Farming Estates LLP cannot be a vehicle for investment by a non-resident under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. These transactions fall under the category of related-party transaction and appear to violate Section 188 of the Companies Act, 2013 and Ind AS 24 of the Indian Accounting Standards. The overall design also appears to invite scrutiny under the General Anti-Avoidance Rules in Chapter X-A of the Income-Tax Act, 1961.

A graphic representation of the flow of money from Blossom Farming Estates LLP to DLF entities and from them back to the Chaurasia's entity is provided here.

For more details on the story, please log on to Cobrapost.com.

Cobrapost Team

Disclaimer:

This story is based on regulatory filings, including annual reports, and other relevant records of the Ministry of Corporate Affairs and the entities involved. Every effort has been made, in good faith, to be complete and meticulous in extracting, collating, interpreting, and verifying the said information in the interests of our readers and the public. Despite best efforts, if any inadvertent and unintentional errors remain, we request you to contact us on contact@cobrapost.com to enable us to rectify them immediately.