Meet Kabul Chawla, an Indian builder who duped 400 but bought a top-end NY condo

Even as pressure  is heightening on the Indian government to chase black money stashed abroad, a New York Times investigation into foreign fund flows into top-end New York real estate has revealed names of two Indian businessmen who have condominiums in a super luxury residential building in the US city. The two industrialists who have figured in the list are Anil Agarwal of the Vedanta group and Kabul Chawla, a New Delhi-based builder. Both of them have figured among the list of wealthy foreigners who bought condominiums in the super luxurious Time Warner Center through shell companies. At least 16 of these super rich “have been the subject of government inquiries around the world” for the case which includes a housing scam, environmental violations and financial fraud. Time Warner Center is a super expensive twin tower building in New York city, which has, apart from residences, a retail atrium, corporate offices and a hotel. According to the NYT report, the building had “transformed the area into a vibrant shopping and dining destination in the aftermath of the Sept. 11 attacks”. There is also a mystery surrounding the building. “It’s a really closely guarded secret who is in that building,” one of the architects have been quoted as saying in the report. [caption id=“attachment_2092769” align=“alignleft” width=“380”]  Reuters[/caption] Of the two, Chawla’s case should get special attention as that reveals everything shoddy with the real estate sector in India. Chawla, who owns, and stays in, a 4050-sq ft five-bedroom condo with a view of the Central Park in the building, has taken full payment from 400 buyers who have booked apartments in under-construction Park Serene Apartments in New Delhi. Started in 2008, the construction of the building is not yet over and the buyers, mostly retired military officers, have been protesting against the builder. Many of those who put their entire savings in his project are finding it difficult to find a place to live, says the report. They have collectively invested $35 million in the project. According to the paper, Chawla has denied that he owns  the Time Warner Center apartment, but the newspaper has been able to tie the said condo to him, through his correspondence with real estate agents and other sources. The report says the apartment was bought for $19.4 million in February 2012 and by then protests against him had already started in India. The deal was one of the most expensive in New York real estate that year. Meanwhile, Agarwal of Vedanta, bought the house though a shell company called Amantea Corporation for $9.1 million in 2004. The report notes that Vedanta had virtually held in captives the Kondh tribe in Odisha’s Niyamgiri hills in its bid to start bauxite mining there. The group’s operations in a mine in Zambia had also come under criticism for pollution and financial irregularities, the report says. Giving company to both the Indians in the list are former Russian senator Vitaly Malkin, “who was barred from entering Canada because of suspected connections to organized crime”; and James Nicholson, a hedge fund manager who was arrested for financial fraud in 2009. The reason for the illegal money flow into the US real estate is the opaque laws of the country. “Lacking incentive or legal obligation to identify the sources of money, an entire chain of people involved in high-end real estate sales — lawyers, accountants, title brokers, escrow agents, real estate agents, condo boards and building workers — often operate with blinders on,” notes the report. The newspaper has scrutinised about 200 shell companies for the investigation.