Indian palace runs into red tape
Friday, 6 July 2007
Joe Leahy, FT Syndication Service
MUMBAI: A plan by Mukesh Ambani to build what could be the world's most lavish private home on the site of a Mumbai orphanage has run into red tape, showing that even India's richest man is not immune to the complexities of Indian bureaucracy.
The Maharashtra state government has issued an order to confiscate the land, which it alleges was sold illegally to the oil and petrochemicals baron. He is already part way through building his 27-storey "palace in the air" on the site.
Anees Ahmad, a minister with the state government, said the Ambani property "is really an orphanage house. As per the government constitution of this country, these lands cannot be sold or purchased".
The new Ambani family home will rise 570 feet - the equivalent in height of a 60-storey residential building - and will have six levels of parking, a pool and a helipad. Named Antillia after a legendary island near Spain, it is regarded as one of the most extravagant displays of material wealth in India's modern history.
But the latest developments show that even the best-laid plans of the country's most powerful can come undone, particularly when it comes to property in a country where land title is notoriously fickle and legal challenges to development common.
With more than half of Mumbai's population living in slums, the plan by Mr Ambani, the chairman of Reliance Industries and the world's 14th richest man, to build the $500m home has attracted plenty of criticism.
But the issue of the status of the site emerged only this week following a parliamentary review of a body known as the Wakf Board, which oversees Muslim religious properties that had been donated for charitable purposes.
The government is alleging the Ambani property, which was owned by an orphanage trust, is one of several such sites that the Wakf Board has illegally allowed to be sold in Maharashtra and has ordered the body to recover them for their original purpose.
Mr Ambani reportedly paid the orphanage trust Rs210m ($5.2m, euro3.8m, £2.6m) for the site four years ago, about one-third what it might be worth today.
Mr Ahmad said: "Because Wakf land cannot be sold, neither can it be leased out. So the transaction is null and void."
Reliance Industries declined to comment on July 4. But a person familiar with the issue said at this point the dispute was between the government and the Wakf Board, rather than Mr Ambani.
A lawyer familiar with Mumbai's property law said the city's tangled regulations governing land use complicated the issue but his understanding was the trust had sold the property because it could no longer afford to run the orphanage there.
He could not say how Mr Ambani had obtained government permission to change the land use from orphanage to residential.
But he said the Ambani project was bound to attract a lot of unwanted attention, not least from politicians eager for a share of the spoils.
"In this country, it's very difficult to show off this sort of wealth without attracting a lot of publicity and, when you do attract that publicity, it then can become quite unpleasant," the lawyer added.
MUMBAI: A plan by Mukesh Ambani to build what could be the world's most lavish private home on the site of a Mumbai orphanage has run into red tape, showing that even India's richest man is not immune to the complexities of Indian bureaucracy.
The Maharashtra state government has issued an order to confiscate the land, which it alleges was sold illegally to the oil and petrochemicals baron. He is already part way through building his 27-storey "palace in the air" on the site.
Anees Ahmad, a minister with the state government, said the Ambani property "is really an orphanage house. As per the government constitution of this country, these lands cannot be sold or purchased".
The new Ambani family home will rise 570 feet - the equivalent in height of a 60-storey residential building - and will have six levels of parking, a pool and a helipad. Named Antillia after a legendary island near Spain, it is regarded as one of the most extravagant displays of material wealth in India's modern history.
But the latest developments show that even the best-laid plans of the country's most powerful can come undone, particularly when it comes to property in a country where land title is notoriously fickle and legal challenges to development common.
With more than half of Mumbai's population living in slums, the plan by Mr Ambani, the chairman of Reliance Industries and the world's 14th richest man, to build the $500m home has attracted plenty of criticism.
But the issue of the status of the site emerged only this week following a parliamentary review of a body known as the Wakf Board, which oversees Muslim religious properties that had been donated for charitable purposes.
The government is alleging the Ambani property, which was owned by an orphanage trust, is one of several such sites that the Wakf Board has illegally allowed to be sold in Maharashtra and has ordered the body to recover them for their original purpose.
Mr Ambani reportedly paid the orphanage trust Rs210m ($5.2m, euro3.8m, £2.6m) for the site four years ago, about one-third what it might be worth today.
Mr Ahmad said: "Because Wakf land cannot be sold, neither can it be leased out. So the transaction is null and void."
Reliance Industries declined to comment on July 4. But a person familiar with the issue said at this point the dispute was between the government and the Wakf Board, rather than Mr Ambani.
A lawyer familiar with Mumbai's property law said the city's tangled regulations governing land use complicated the issue but his understanding was the trust had sold the property because it could no longer afford to run the orphanage there.
He could not say how Mr Ambani had obtained government permission to change the land use from orphanage to residential.
But he said the Ambani project was bound to attract a lot of unwanted attention, not least from politicians eager for a share of the spoils.
"In this country, it's very difficult to show off this sort of wealth without attracting a lot of publicity and, when you do attract that publicity, it then can become quite unpleasant," the lawyer added.