Canading research firm, Veritas Investment Research has accused DLF, which is indian's leading construction sector player, of inflating its assets through inappropriate dealings.

The report by the first has claimed that the company has been misappropriating its books form the last four years. Company analysts Neeraj Monga and Nitin Mangal have said in a recent report on DLF titled 'crumbling edifice' that the company's shares are best priced at Rs. 100 compared to their current market value of more than two hundred rupees.

Monga and Mangal said that the company has a lack of free cash flows, no credible plan to reduce debt on its balance sheet and excessive focus on the city of Gurgaon. The analysts said that these factors would force the company to require financial assistance to restructure its debt.

The repot also indicates, without directly laying the accusations that DLF indulged in questionable dealings with DLF Assets at the time of the merger of the two firms. The dealings had helped push up the purchase price of DAL. The report pointed out that DLF minority shareholders had lost earnings in the process.

The report says that the management has not be determined in the company's vision. It cites the example of company's entry into hotels, plans to build mega townships and a mega convention center, all of which are scrapped or are up for sale.

The shares of DLF fell 3.5 per cent over their previous close to Rs 218.50 as Veritas advised its clients to sell their shares in the company.