A couple of days back, Mumbai's leading real estate developer, which is also listed on the bourses was in the news for bouncing a cheque thrice.
Another listed Delhi developer is mired in controversy relating to the 2G scam. And now, the nation's largest real estate developer, DLF has been accused of inflating assets.
A report by Veritas has alleged that the Delhi based developer has been fudging its books for the last several years with large amounts of financial irregularities.
The Veritas report alleges DLF inflated sales by a staggering sum, as also profits through its dealings with DLF Assets.
Corporate governance standards in the real estate sector has plummeted to ridiculously low levels, leading to erosion in wealth of poor shareholders who have lost heavily in the last few years.
Eroding shareholder wealth
Consider this: In January 2008, the stock of the Delhi based Unitech was trading at a high of Rs 534 - it's currently trading at just Rs 32.25 on March, 2, 2012. Mumbai's leading developer, HDIL was trading at Rs 1113 in January 2008, and has since collapsed to Rs 105. And DLF which was traded at Rs 1225 in January 2008, has come down to Rs 204.
For long analysts have sought better scrutiny of books and the recent Veritas report on allegations of inflated accounts has created a storm and forced the Corporate Affairs Ministry to order an inspection into the books.
Till the investigations are complete, poor investors can lament over their folly of buying real estate stocks and ending up with huge losses.