Monday Musings:3 years since DSK’s arrest... desperation grows among investors
PUNE Till five years ago, when Pune developer DS Kulkarni, a.k.a. DSK, used to share his life experiences on All India Radio’s (AIR) morning show, many used to see his anecdotes as aspiring tales worth emulating.
As the developer completed three years in jail on February 17, with most of his family members also behind the bars, those invested in his schemes are losing patient.
For these investors, if the arrest of the self-made billionaire, who is looking frail these days during the court proceedings, may have initially cheered hundreds of investors awaiting their hard-earned returns, the long and complicated legal process has only extended their wait.
So, if the Yerawada prison has made life difficult for DS Kulkarni, the situation of many investors outside is equally bad, given the fact that most of them are senior citizens.
So much so, a few investors have initiated the process of selling their fix deposits and non-convertible debentures (NCDs) at a price one-tenth of the actual value.
The buyers are those willing to take the risk and gamble. These buyers with deep pockets can afford to wait till the case is resolved and investors get their money back after land holdings of DSK find buyers in the market.
It was around 2015, when DS Kulkarni was at the peak of his business. The heydays in real estate prompted the ambitious businessman to launch one of the biggest projects of the DSK group -Dream City – on a land parcel at Phursungi.
The same project, however, led to his downfall as he failed to repay the depositors’ money as demonetisation wiped out cash from the market.
To finance the project, DSK started raising money through bank loans and deposits from citizens, who were promised higher interest rates as compared to the market. However, his arrest paused the development at Dream City and other real estate projects in Pune and parts of Maharashtra
There are around 33,000 depositors identified with 6,792 complaints filed against DS Kulkarni in various parts of Maharashtra, including Pune, Mumbai and Kolhapur, according to the chargesheet filed against the real estate developer.
The developer, as per the chargesheet, had raised ₹1,083 crore through unsecured loans from the banks and financial institutions, deposits and debentures. The probe also revealed a complex web of money flow and siphoning off large sums, as revealed in the supplementary chargesheet.
In some of the schemes, brokers or middlemen lured investors to put in their money. The investors, however, have failed to provide the names of these middlemen, who have benefited from these investments given that they got the bulk of commissions.
In the court, the case is currently at a stage where the prosecution is likely to frame charges against DSK and the family. It may take time before the actual trial begins, and the court disposes of the case.
Till then, the investors can show a little more patience.
DSK is not just one scheme where investors are awaiting justice. The Covid-induced lockdown was a double whammy for investors in the Shivajirao Bhosale bank case or Pancard club investment scheme, both currently being probed by police. The Pan Card Club, which began operations in 1997 collected ₹1,400 crore from depositors nationally. The investors are now awaiting their money back.
The same goes with the Shivajirao Bhosale bank case, where police have arrested the Nationalist Congress Party’s (NCP) member of the legislative council, Shivaji Bhosale, along with other bank officers, on charges of a ₹71 crore fraud and other financial misappropriations running into crores.
The bank, with 12 branches and ₹430 crore deposits, across Pune district and 1.10 lakh account holders, was promoted by Bhosale.
The woes of investors are unending. But, patience may be the key to some relief… if any.