Prime city plot sold for 1.75cr in 2002 fetches 600cr 10 yrs later

8-Acre Land Was 'Gifted' Away By MP Govt Company Nauzer K Bharucha TNN  Mumbai: An eight-acre plot in Kalachowkie in the heart of central Mumbai which was sold for a throwaway price of Rs 1.75 crore a decade ago by a Madhya  Pradesh government undertaking to a small-time developer, fetched Rs 600 crore last month.      South Mumbai property redeveloper Haresh Mehta, who was in possession of the property for the past two years, sold it to the Lodha Group, it is learned. The Lodhas have already announced a residential project on this land.      Last year, this paper had reported how the prime property had originally been sold for peanuts by the MP government-owned Provident Investment Company Ltd.  HOW TO BUILD A FORTUNE  • Eight-acre plot was sold by MP govt-owned company for Rs 1.75 crore in 2002  • Last year, buyer pushed for redevelopment of land  • SRA declared entire Ambewadi plot a slum, although it housed legitimate chawl residents  • Residents then complained to MP govt about cheap sale  • But company said it had invited bids in 2002 and sold it to highest bidder  • Plot was re-sold for Rs 600 crore to the Lodha group a month ago  • New owner plans to launch a mega residential project Plot value appreciated 350 times in 10 years  Mumbai:ThesprawlingKalachowkie plot that fetched developer Haresh Mehta Rs 600 crore has a controversial past. Twoyearsago,Mehta'scompany,RohanLifescapes,tookover the redevelopment rights of Ambewadi from Paras Porwal to jointly develop the property. Subsequently, Porwal sold the entire project to Mehta for an undisclosedamount.      In 2010, JP Morgan Chase's privateequityarminvestedRs 160 crore in the first phase of Rohan Lifescapes' Kalachowkie project. JP Morgan's arm was to receive around 26% stake in the project and the dealwaslikelytofetchaninternal rate of return of 24-25% a year. Rohan Lifescapes sold around five lakh sq feet to Lodha about a month ago. Soon, Mehtadecidedtoputtheentire project on the block and found a willing buyer in Lodha. The plot was originally owned by Provident Investment Company Ltd, a MP government undertaking, when it decided to call for tenders in 2002. The highest bidder was Esque Finmark, a firm owned by a politicallyconnecteddeveloper,Porwal.Whatraisedeyebrowswas whenitwasdiscoveredthatthe highest bid was just Rs 1.76 crore, a price of a mid-sized apartment. Although the real estate market was not exactly booming in 2002, the plot could havestillfetchedatleastRs160 acreatRs20croreanacre.      The controversial transaction between PIC Ltd and Esque Finmark came out in the open only last year when some tenants of Ambewadidug up informationaboutthestatusof the land. Residents alleged the Slum Redevelopment Authority "hurriedly" declared the entire 32,000 sq m sprawl as a slum, although they are legitimate chawl tenants. Two Ambewadi housingsocieties, Shri Khapri Baba and Om Sai Darshan,challengedtheslumnotification.Theysaidin1996,2,275 sqmof the32,411sqmlandwas declared a slum. Residents of the tiny slum portion went on toformtheirownsociety,Yashodhan. Now, the SRA has classified the entire sprawl as a slum based on the tag given to Yashodhan,theysaid.      The tenants then wrote to the MP government, asking if it had given a NOC for the sale. MP government officials said they knew nothing about the transaction as it had occurred adecadeago.PICLtdsaidithad announcedthelandsaleintwo city newspapers. It decided to sell the property as it was encumbered and hence not gettinggoodreturns. PLOT OF GOLD: The 32,000 sq m Ambewadi colony at Kalachowkie The TOI report on July 3, 2011