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CORRECTED-India DLF shares drop after improper deals accusations; claims denied

(Corrects paragraph 3 to note India Against Corruption is thename of Kejriwal's anti-graft group, not the name of the newpolitical party)

MUMBAI, Oct 8 (Reuters) - Shares in India's DLF Ltddropped after anti-corruption activists accused the country'sbiggest property developer of improper dealings with a member ofa prominent politician's family, prompting denials from thecompany.

The shares were down 3.8 percent as of 0429 GMT, afterfalling as much as 5 percent. The benchmark BSE index declined0.26 percent.

Activist Arvind Kejriwal, along with a colleague from theiranti-graft group India Against Corruption, accused DLF on Fridayof arranging favourable loans and real estate transactions forRobert Vadra - the son-in-law of Sonia Gandhi, chief of India'sruling Congress Party. DLF denied the allegations.

"We would like to state that the business relationship ofDLF with Mr Robert Vadra or his companies has been in hiscapacity as an individual entrepreneur, on a completelytransparent and at an arm's length basis," DLF said in astatement on Saturday.

"Our business relationship has been conducted to the higheststandards of ethics and transparency, as has been our businesspractices, all around."

Vadra was quoted by the Times of India newspaper calling theaccusations "utterly false, entirely baseless and defamatory."

(Reporting by Rafael Nam; Editing by Ryan Woo)

((rafael.nam@thomsonreuters.com)(+91-22)(6180-7425)(Reuters

Messaging: rafael.nam.thomsonreuters.com@reuters.net))

Keywords: INDIA DLF/SHARES