Lavasa and LIC Housing have no links

"Lavasa construction company 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 today.

He denied any wrongdoing or involvement with Lavasa construction 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.

Environment Ministry's notice shocks Lavasa Corp.

Pune-based Lavasa Corporation , a subsidiary of HCC , today expressed shock over the Environment Ministry .s showcause notice to it for allegedly carrying out construction activities without approval.

"Lavasa Corporation Ltd is shocked at the receipt of a 'stop work' notice from the Ministry of External Affairs on November 26," a spokesperson from the company said in a statement.

Lavasa, engaged in the building and management of a hill-city near Pune, also said it has already responded to issues raised by the Environment Ministry.

"In an earlier communication to the government of Maharashtra, issues raised by the MoEF had already been responded to," the spokesperson said.

The MoEF had on November 25 slapped a showcause notice on Lavasa, a unit of Hindustan Construction Company (HCC), for carrying out construction activities without its approval in 25,000 hectares.

The ministry has given 15 days to the company, asking as to why the unauthorised structures erected by it, without any environmental clearance, between March 2003 and September 2006 in Mulshi and Velhe Talukas in Pune should not be demolished in their entirety.

The constructions, it said, were in violation of the Environment Impact Assessment Notification, 2006.