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Trump Tower hits hurdle in Gurgaon

The Trump Tower project was launched in January 2018 by real estate developer M3M India Ltd in collaboration with Tribeca Developers. Donald Trump Jr., who heads the Trump Organization, visited India in February to celebrate the launch of the project.

gurgaon Updated: Mar 18, 2018 17:50 IST
Hitender Rao
Hitender Rao
Hindustan Times, Chandigarh
Trump Tower,Gurgaon,Donald Trump Jr
Labourers work on the road leading to the under-construction Trump Tower in Kolkata on February 20, 2018.(AFP Photo)

The Trump Tower luxury residential project in Gurgaon, hard-sold by US President Donald Trump’s eldest son on a visit to India last month, has run into a potential stumbling block just two months after its launch.

Haryana’s Town and Country Planning Department (TCPD) has raised objections to the launch of the project before the grant of joint development and marketing rights to Olive Realcon Pvt Ltd, for which the rights were sought by the licencee. The department has issued a show-cause notice to the project licensee Manglam Multiplex Pvt Ltd, asking it to explain why proceedings should not be initiated against the project developers under section 10 of the Haryana Development and Regulation of Urban Areas Act, two TCPD officials said on condition of anonymity.

Section 10, which deals with penalties, says that any person who contravenes any provisions of the Act or the conditions of a licence, shall be punishable with imprisonment for a term that may extend to three years and also be liable to pay a fine.

HT hasn’t seen a copy of the notice, dated March 16, which, the officials said, asked Manglam Multiplex to “show cause within 30 days as to why the colonization licence granted to it should not be cancelled for violating its terms and conditions.” Calls made to TL Satyaprakash, director of TCPD, weren’t answered.

The matter will also be referred to the Haryana Real Estate Regulatory Authority (HRERA), Gurgaon, under section 7 of the Real Estate (Regulation and Development) Act, for revoking the registration of the developers for suspected unfair practices, said an official with knowledge of the matter.

The TCPD has also objected to the showcasing of the Trump brand and mention of Tribeca Developers, the exclusive representative of the Trump Organization in India, in project advertisements without its approval, another government official said. This resulted in the promoters receiving both commercial visibility and reaping earnings, this official said.

The Trump Tower project was launched in January 2018 by real estate developer M3M India Ltd in collaboration with Tribeca Developers. Donald Trump Jr., who heads the Trump Organization, visited India in February to celebrate the launch of the project, held a conversation and had dinner with a select gathering in Delhi. M3M Developers, in a February statement, said that it had already sold properties worth Rs 500 crore since the launch in January.

About 250 apartments are to be built in two 600-foot-high towers close to a golf course in Sector 65 of Gurgaon, located on the southern outskirts of Delhi in Haryana. The apartments will be priced between Rs 5 crore and Rs 9 crore.

Manglam Multiplex is the license holder of the project, but project advertisements have mentioned M3M Developers and Tribeca Developers. The ads say the project is a joint venture between M3M and Tribeca. Olive Realcon is a new entity for which Manglam Multiplex has sought permission from the TCPD to assign joint development and marketing rights. The approvals are pending. The disclaimer on the Trump Tower Delhi NCR website say that Olive Realcon, the owner and developer of the property, uses the Trump name and mark under license. One of the stipulations under the policy that dictates change in beneficial interest is that the name of the licensee of the project should be displayed prominently in advertisements.

Businessman Basant Bansal acquired the licence for the project land in the name of Manglam Multiplex in 2007. He launched M3M in 2007. The show-cause notice is in the name of Manglam Multiplex because it can only be served on the licence holder, a TCPD official said.

The project is not owned, developed or sold by the Trump Organization, which has licensing agreements with its Indian partners, who build the projects and acquire the Trump brand name by paying a fee.

An InMail message sent on Linkedin to Donald Trump Jr .,seeking a comment from the Trump Organization, did not elicit a response.

Manglam Multiplex made a request to the TCPD in October 2017 to assign joint development and marketing rights to Olive Realcon for constructing and marketing the Trump Tower apartments spread across 2.83 acres in Sector 65, Gurgaon. This was essential for using the Trump name and mark for the project.

The request was pending approval because of checks having been initiated by the department on the status of the land, a state official said.

The checks had been initiated to ensure that the project wasn’t coming up on land whose release from an acquisition process was being probed by the Central Bureau of Investigation (CBI) on the orders of the Supreme Court. In November 2017, the SC ordered the CBI to investigate the release of a majority of 1,400 acres of land being acquired in eight villages during the rule of the previous Congress government. The acquisition was meant for residential projects in sectors 58 to 63 and residential-commercial projects in sectors 65 to 67 of Gurgaon.

Also, Olive Realcon was yet to fulfil financial conditions set by the TCPD.Documents submitted by Olive Realcon showed its paid-up capital was Rs 1 lakh; the required paid-up capital was Rs 2 crore. The TCPD asked the company to enhance its paid-up capital, an official said .

When asked for a comment on the matter, Basant Bansal, chairman of the M3M group, said that the project land was free from encumbrance. “The Trump Tower project land is not part of the CBI probe,’’ he said. Bansal did not answer a question as to how the developers would go ahead with the Trump Towers project in the absence of approval for joint development and marketing rights to Olive Realcon.

An email sent to Tribeca director and founder Kalpesh Mehta didn’t elicit a response from him, but he forwarded it to Manish Jaiswal, a director at Olive Realcon, who echoed Bansal’s reply but didn’t say how the project could go ahead in the absence of approvals that had been sought.

The Gurgaon project is the Trump Organization’s fourth and last residential project in India, Mint reported on January 11. “For the foreseeable future, this is the last residential project in India. The plan right now is to focus on completing sales and deliveries of other existing projects,” the report cited Kalpesh Mehta as saying.

First Published: Mar 18, 2018 07:47 IST