WB govt to audit operations of its real estate Joint venture
The west Bengal government is focusing to exit from the joint sector real estate ventures and has involved professional services firm EY to audit the working of nine companies in which the state holds shares.
As per the official, EY has tied up with Fox and Mandal to organize complete audit.
A major official says that the state is looking discuss its exit from the position of strength and wants EY and Fox and Mandal to reveal corrupt practices at these joint venture companies which have been managed by private promoters. The state holds 50 percent in this organization and provides land for the projects.
Mr. Alapan Bandyopadhyay, principal secretary in the state’s housing department, says that they are busy to focus in to different aspects of these JV (joint venture) companies to enable them to prepare the plans for future. He declares that EY is not going to organize a forensic audit which requires the checking of a company’s books for searching evidence of fraud.
A major official says that digging is needed remove the corruption and EY is ready to dig.
Mr. Debanjan Mandal, partner, Fox and Mandal, says that they are looking forward to share their experience in the area of joint sector real estate development with one of the world’s top professional organization. They were hoping that the state finds their experience useful in making plans.
Starting in 1990s, the WB government founded nine joint venture companies to increase the supply of affordable homes for low- and middle-income families. Due to the WB’s restrictive laws on private ownership of land the developers could undertake large projects only through JV with the state government. In return the WB government suggested that the half of each project undertaken by these JV firms would have to be fixed for people from low- and middle-income groups.
Mr. Harshavardhan Neotia, chairman, Ambuja Neotia Group, says that it is the state right to assess if the defined objectives of joint sector development were obtained. He further added that he wish that this practice is concluded rapidly and the state’s plans for future are clearly mentioned.
A group of real estate developers are having opinion that these joint sector companies should be cut up because the recent administration under the Trinamool Congress party does not appear to have any idea for the land allotment in future.
Mr. Rahul Todi, managing director, Bengal Shrachi, says that they are hopeful that this practice will help the state government to decide what they want to do regarding joint sector home development.
An official says that the government wants to be sure that they received right share of profit.
Mr. Harsh Patodia, managing director of managing director of Heritage Realty Group and president of the West Bengal chapter of lobby group Confederation of Real Estate Developers’ Association of India, says that if there was any issue than the government nominees on the boards of these companies are performing their duties or not. He further added that the government must respect that it is not possible to forecast price increase in real estate projects.
Source: Live Mint
Alapan Bandyopadhyay, Ambuja Neotia Group, Bengal Shrachi, Debanjan Mandal, Ernst and Young, EY, Harsh Patodia, Harshavardhan Neotia, Heritage Realty Group, Joint venture, JV, Rahul Todi, Realty News, Trinamool Congress, West Bengal government
