The barefaced lies of New Metro City

The pet project of property mogul Malik Riaz’s grandson, New Metro City Gujar Khan is a ...

A month ago, real estate agents, sales partners, consultants and prospective investors were all invited to a dinner in Lahore. They turned up in droves. The dinner was a lavish affair with a variety of dishes and raucous merrymaking. 

All of them were there at the beck of one man: Bilal Bashir Malik. Young, smartly dressed, well-spoken, and surrounded at all times by a retinue of guards, drivers, and associates, he is the CEO of Bilal Steel Mills, a business that has now expanded into the world of real estate in the form of BSM Developers. He is also the maternal grandson of property mogul Malik Riaz. 

At some point during the dinner hosted by Bilal, Zaroon Masood, the country head for BSM Developers Pakistan, got up to address the crowd. He thanked the sales partners and real estate agents for coming to the dinner, many of whom had travelled from Islamabad and Rawalpindi. And then he went on a sales pitch for BSM Developers latest project — The New Metro City housing society in the hilly Gujar Khan area in Rawalpindi. This would be the second project under the ‘New Metro World’ name being undertaken by Bilal, with the first currently still under development in Sirai Alamgir. 

The dinner took place in the beginning of August. But it was not a surprise to any of the people there. Two weeks before on the 14th of July 2022, the youtube account of New Metro City posted a video titled ‘Best Wishes by 𝐌𝐚𝐥𝐢𝐤 𝐑𝐢𝐚𝐳 for his grandson 𝐁𝐢𝐥𝐚𝐥 𝐁𝐚𝐬𝐡𝐢𝐫 𝐌𝐚𝐥𝐢𝐤.’ In the video, Malik Riaz can be seen piling praise on his grandson. “I want to make it clear. New Metro City’s commitment is Bahria Town’s commitment. I am proud of Bilal, and I know he will maintain the standards of our family, and do even better work than what we did in Bahria Town. He will turn Sirai Alamgir and any other such cities in Pakistan into London, Paris, and Dubai.” 

The message is clear. Bilal might be running the project, but with the express nod of approval from his grandfather. The results were immediate. Right after the dinner, investment started pouring into New Metro City Gujar Khan. 

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Within days, a massive marketing campaign was launched. The entrance to DHA Lahore from the Walton end was covered in huge billboards. Rawalpindi produced a similar picture. Television channels ran elaborate ads promising a utopian life in the under-construction society. Simultaneously, property dealers started drumming up the project and telling their clients it was an opportunity not to be missed. The ads carried claims that the society was approved by the Rawalpindi Development Authority (RDA) and was ready for plotting.

Perhaps one of the strangest parts of the entire campaign was a video advertisement. The ad features HD footage of horses, jingoism, and vague poetics about the Potohar region all narrated by the voice of legendary thespian Zia Mohyeddin. The ad itself makes no sense. None at all. But what it does tell you is two things — whoever made the ad has money and they hired a celebrity to narrate it. In Pakistan, money and fame give you one crucial element to run a business — legitimacy. 

Of course, the reality is not quite as pretty as the picture being painted through the advertisement. And all the money being spent to gain this legitimacy was being done so precisely because the project has very little of it in reality. For starters, the RDA has confirmed to Profit  that the society is entirely illegal and not RDA approved despite their claims, which they have termed “barefaced lies.” When Profit first called the RDA spokesperson to inquire about whether the society had been approved by the RDA the spokesperson immediately responded by saying “illegal hai, illegal hai, illegal hai.” 

Then there is the fact that BSM Developers themselves have confirmed to Profit that they have not acquired the land in Gujar Khan and have only made plans to do so as of now. That means they are accepting money for plots without having acquired the land — which is against RDA regulations. 

This is, for all intents and purposes, a typical Pakistani real estate project scam. One where developers fail to acquire land before developing it, use aggressive marketing techniques to get people to buy ‘files’ or ‘certificates’ in the lieu of plots, and then leave these investors to languish for years.  

The anatomy of real estate fraud 

At the earlier mentioned dinner, Masood announced an early-bird balloting opportunity to invest in the project on the 20th of August. None of these people had seen the project yet, but the money started rolling in. Some of the investors knew that since the project was so openly backed by Malik Riaz, it was an opportunity to sink their teeth into a project that was about to get a heavy dose of marketing, and that if they invested they could convince a lot of eventual plot buyers to spend money on it.  

It is a story we have seen plenty of times. Investors in the hopes of making money or having savings for their future invest in these housing societies. They trust them because the societies run massive marketing campaigns with callous disregard for the truth. They also trust them because the project is backed by large groups and famous business families who hire celebrities as ambassadors for their projects. We have seen it happen before in Gujranwala and in Chakri and in so many other places.In the end, after the investor has surrendered their money, they are flippantly informed that the project is pending approval and given some half-baked excuse, leaving them to the dogs.

The way it works is pretty straightforward and well known. What happens is that whenever a developer launches a housing scheme, they never have enough investment to buy a large enough tract of land to impress possible buyers. What they do then is go on a marketing campaign in which they announce a new housing scheme, often getting celebrity endorsements and pasting huge advertisements all over the cityscape. They then offer what they call ‘advance booking’ and present it as a chance to be some of the first people to buy plots for cheap in the new society. 

What they are doing instead is getting together enough capital from these ‘advance bookings’ to actually be able to buy the land required for the project. The people investing are told their plots are still in the development stage and they will only be told where their plot is once the technical aspects of mapping and zoning are figured out. The truth is that the land has not yet been purchased by the real estate developer. 

So how do they get people to buy these prospective plots that they cannot see or visit?  Every savvy developer hires an army of local property dealers on commission to sell files for their scheme. Now, you might think that this is simply an issue of semantics of what customers are promised and shady selling techniques, except the problem goes deeper than this. For example, if enough investments are not collected and the project is halted, the people that bought the files could have tied up their money for decades to come. 

The situation of New Metro City in Gujar Khan is very similar. And it worked. A sales partner of New Metro City said on the condition of anonymity that by August 20, BSM Developers had collected more than Rs20 billion by selling plots of different sizes — plots that they had not acquired yet let alone develop. 

“The purpose of the early bird balloting was to create such a hype that more people would be tempted to get a plot in A block although the allotment was committed to only a select few people in this draw. If one guesses accordingly, if Rs20 billion was collected before the draw, after the draw, this amount will be more than double because the society has created the payment plan in such a way,” they said.

The legality issue

All of this leads to the question of whether or not this kind of real estate project is legal. There are a few questions to ask here. The first is, have BSM Developers acquired the land for development in Gujar Khan? If they haven’t, how can they know they will be able to provide plots to the people they are committing to. The second question is, if the land has not been acquired, is the society approved by the RDA, since the authority’s regulations hold that societies cannot go into marketing stage until and unless they have acquired a certain percentage of the land. And if the RDA has not approved the society, then how in the world have they been allowed to advertise all over the place with no consequence? 

In a meeting at the New Metro City’s office in DHA Lahore, Bilal Malik’s personal staff officer, Asana Musa told Profit that the former was unavailable for comment but that he would be available to answer any questions. When Profit asked him about the legality of the society, Musa admitted that the land had still not been acquired in Gujar Khan but that the project itself was RDA approved. “How can such a huge advertising campaign be run without approval? Bilal Malik is actually the real grandson of Malik Riaz and is running three real estate projects. One is in Sarai Alamgir, the other is in Gwadar and the third is in Gujar Khan,” he maintained.

“The land purchase process for New Metro City has not been completed yet, and the final area of the project has also not been determined. The process is underway, however, and will be completed soon. There have been other murmurings also that the project is in a green area. It is in a hilly area but it is completely legal to make a society over here.” 

The last part of the statement is true. This is not a green area, and is in fact legal for society building. More importantly, it is not government land. Most people have their ancestral lands in Gujar Khan and some are willing to sell to Bilal Malik. However, the problem is that a lot of people in the area do not want to sell as well. Without acquiring the land, the BSM Developers will be unable to complete plotting and planning of the project. So how have they then been able to market the project and even sell files and hold early-bird balloting for Block A in the project? According to the RDA, it is all a complete lie. 

“The list of all approved societies is available on our website. An NOC has not been issued to New Metro City Gujar Khan. The status of said society is also being asked by various people to which we are responding the same way — it is illegal.There are only 60 approved housing societies on the RDA website and the name of New Metro City is nowhere in the list,” says RDA spokesperson, Hafiz Irfan. The problem is that despite the RDA telling people the society is illegal, both developers and real estate agents that they have hired to promote their society are more influential than even the RDA. 

It is, essentially, a classic case of having the cart before the horse. Any real estate developed should first acquire land, get permission from the authorities, and then start marketing and selling the project. Instead, projects like New Metro City and indeed other societies begin by marketing it first, then trying to (unsuccessfully) get permissions, and then trying to (unsuccessfully) acquire the land. And yes, the RDA can do very little. 

Why the impunity? 

“The RDA is completely toothless here. In the market, the news is that this society is being run by Malik Riaz’s nephew. People don’t even know that it is his nawasa but just the name Malik Riaz is enough to convince people. If anyone called the RDA number they would tell them it is illegal. In fact, the RDA regularly encourages people to check with them but their reach is very low. Only the people who call and ask find out it is illegal, the rest is kept hush hush,” says one sales partner of the project on the condition of anonymity. 

“I myself am a part of the project and know that it is a fraud. That is just the nature of the real estate sector. However, nothing can be done about it. We are all a part of it and make profit from it. The reality is that the RDA cannot do anything. Even if they decided to conduct the operation, they would get such little cooperation from the police that it wouldn’t make a dent to New Metro City.” 

This is a sad reality. The RDA has ticked all of the necessary boxes. Their spokesperson has declared the society illegal to the press and they have even put up an advertisement in a local paper. However, other than these measures to cover their own tracks there has been nothing else the RDA has done. One of the big reasons for this, as explained by locals and property developers involved in the project, is that the police and RDA are both afraid of taking action against a project backed by Malik Riaz. 

“Even if the RDA were to request a police operation, at first the police would not cooperate. They would ask them to keep delaying and warn the other side instead,” said the sales partner Profit spoke to. “Once they would finally get to conduct an operation, they would just stand around and at most arrest a couple of uninvolved people and register an FIR to cover their tracks and that would be that. The marketing would continue and the society would go nowhere.” 

Another official of RDA, on the condition of anonymity, informed Profit that the authority had issued regular guidelines regarding investing in housing societies or real estate projects to inform the public and keep them away from fraud. However, the message rarely has enough reach. 

 “We clearly inform people that they must check with the revenue department whether the said project has enough land or not. Likewise, it is important for the buyer to check with the relevant authority attest the approved map of the society and ask for a certified copy of the approved map along with the registration. It is also interesting to note that most of the housing societies do not mention the development costs in their advertisements, whereas it is essential. These details should be well known and in-writing.”

The official further said that the RDA has released the list of only approved societies on the web portal which creates confusion for the common man. “The project which is illegal should be listed separately. The tragedy of our authority is that the official numbers given for public information either do not receive calls or these numbers are given incorrectly.”

This, of course, is also a commentary against the RDA. Their messaging is pathetically weak and rarely reaches investors. Large developers so easily swoop in and use mass marketing campaigns and on-ground real estate dealers to hype up a project that they can get away with bare-faced lies. On top of that, it is also understood by some that the high-brass of such development authorities (not necessarily the RDA) often protect large real estate developers because they are too afraid to take action against them.  

Despite the RDA’s rejection of the project and statement that it is illegal, New Metro City Gujar Khan has managed to advertise without impunity. The project has been heavily advertised in Walton Cantonment Board (WCB) Lahore limits (which is also the gateway to DHA) with a formal claim that the society is RDA approved. 

A senior official of WCB informed Profit that the client does not approach the board directly for booking such sites but they are given on rent through vendors. “Now here it must be negligence on the part of the board that legal documents of such clients are not checked before advertising them and the same practice continues in DHA.This is why illegal real estate projects easily manage to fool the public by promoting themselves.”

The finger pointing is nothing new. The reality is that both the vendor and the cantonment board have a responsibility, but when even the RDA cannot get their message across it allows real estate developers to get away with a lot. 

DHA Lahore Marketing Officer, Ali Raheel strongly denies this and says that DHA’s legal branch checks all legal documents before advertising to anyone. “DHA sites are also rented out through vendors. Once it happened that we advertised a real estate project which was restrained by the court from selling the land. The matter was immediately taken up by the legal branch,” he said. 

“We have removed all those signboards. At DHA, the client’s advertisements are checked down to the artwork as we have some SOPs. Therefore in view of all such situations only those projects which fulfil all legal requirements are allowed to be advertised.”

Conclusion

There is only one endgame here. As things stand, the story is very familiar and along the same path that so many other real estate projects have gone. The developers will continue collecting money and selling ‘files’ in lieu of plots and people attracted by aggressive marketing will keep coughing up the cash.  

The final victims will be the people who buy these files with the hopes of investment or even a place to live in the future in their hearts. Since the land has not been acquired, and could take ages to do so, the project will be delayed for years to come. Whether any of the victims will get justice or their money back is for the future to know. But precedent would say this is just another case of a faulty housing society. 

Shahab Omer
The writer is a member of the staff and can be reached on [email protected]

5 COMMENTS

  1. Thanks to Profit who wrote this article and FB post for awareness of general people,
    We have been misled by property dealers for a decade now.
    Now it’s time to act smartly.

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