Lavasa has nothing to do with LIC Housing: HCC | business | Hindustan Times
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Lavasa has nothing to do with LIC Housing: HCC

Hindustan Construction Company (HCC) today said its subsidiary Lavasa has nothing to do with LIC Housing Finance - which is allegedly involved in a home loan racket unearthed by the CBI - as it has not taken any loans from it.

business Updated: Nov 26, 2010 16:03 IST

Hindustan Construction Company (HCC) today said its subsidiary Lavasa has nothing to do with LIC Housing Finance - which is allegedly involved in a home loan racket unearthed by the CBI - as it has not taken any loans from it.

"Lavasa has nothing to do with LIC Housing Finance - we have not taken a single penny from them," HCC Chairman and Managing Director Ajit Gulabchand said. He denied any wrongdoing or involvement in the housing finance scam, in which LIC Housing Finance's chief R R Nair and a few public sector bank officials have been arrested by the CBI on November 24.

Gulabchand said, however, that HCC was fully co-operating with the CBI in its investigations. CBI has also arrested Rajesh Sharma, Chief Executive of Money Matters, a firm that the investigating agency said had either bribed or attempted to bribe the officials to get loans sanctioned for many companies, including Lavasa.

Lavasa is considered to be India's first planned hill city located between Mumbai and Pune. Recently, Lavasa Corporation obtained market regulator Sebi's permission to file draft red herring prospectus for its public issue of around Rs 2,000-crore.

Gulabchand said that using a company like Money Matters was a "well-accepted practice" in the industry. He said Money Matters secured around Rs 200-crore out of HCC's Rs 800-cr long-term debt.

"We have been dealing with Money Matters because it came (to us) with a very good business proposal and a very reputed client list. Using such a company is a well-accepted practice and there are many such companies we deal with for debt syndication and equity funding," Gulabchand added.

Besides Lavasa, the CBI has named other companies such as Suzlon and DB Realty. CBI said the officials arrested were receiving illegal gratifications from Money Matters, which was acting as a mediator and facilitator for corporate loans and other facilities from financial institutions.

Gulabchand said the scam, "is not a systemic fault but only an individual aberration. It is unfair to paint everybody with the same brush of a scamster."