Chapter 12G: citi met more than their match in DLF. Their idea here was to take over the entire land and office building parcels of DLF. The finest brains in citi were put to work.
But citi only had basically accountants and B grade MBAs trained in the Citi school of mis management. DLF decided to get some real engineers to build some really good projects. Citi was useful. They lend millions of dollars to poor NRIs to buy DLF properties. The flats were sold to partnership firms of these individuals. Moving money in and out was a non issue for their bankers. Citi was so sure that they would take over DLF that they got HDFC to value the flats at astronomical rates. And even provide loans. Citi did the same themselves. The artificial demand and high leveraging put Gurgaon on fire.
DLF was almost bust. The office properties were not generating enough rent to comply with the complicated structures created by Citi. But JK Chandra delivered a wonder on Golf Course road. The plot was a dud. On most of it no construction was allowed. It was away from the main Gurgaon which was near Maruti and the old Gurgaon road. DLF Magnolias complex became the most valuable real estate in India. The dud land was converted into a golf course. Robert Vadehra was given a share in a south Delhi hotel. And everyone was happy.
Citi cleared around 100% pa. And this was the only real non-scam project on citi venture fund. After the 2008 debacle, there was crisis. Pretty much everyone was sacked. DLF found investors to give them an exit. Transferring a plot was very easy those days. Citibank branch just printed a new partnership deed changing the partners of the firm. and the flat was transferred in five minutes. No stamp duty. No nothing. Money came. Money went.
They said
The Citi Never Sleeps.
RBI was mostly sleeping.
