News & Views on Indian Real Estate

Wednesday, July 30, 2008

IFCI, Emaar MGF in Dispute

IFCI has taken real estate major, Emaar MGF to court, alleging non-refund of Rs 50 crore invested in a pre-IPO placement transaction with the real estate company. Earlier this year, Emaar MGF had approached the capital markets with an Initial Public Offer (IPO) of about Rs 6, 500 crore but had to withdraw it because of adverse market conditions. Sources in IFCI claimed that it had taken recourse to legal action as Emaar MGF was not refunding the money, but instead had offered shares at a price much lower than the price band. This was not acceptable to IFCI, which sought refund of the entire money with interest. An Emaar MGF spokes person said, "There is a minor issue with IFCI pertaining to the interest amount which is contractually and legally not permissible. We are committed to resolve this issue of interest amounting to a meagre sum of Rs 1.5 crore (approximately), and are in discussions with IFCI."