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3-firm consortium to take over DS Kulkarni Developers Limited
Ashdan Properties, Classic Promoters and Builders and Atul Builders will take over the debt-ridden group through the insolvency process
Investors of DS Kulkarni Developers Limited may see some payback, as a consortium of three firms, comprising Ashdan Properties, Classic Promoters and Builders and Atul Builders will take over the debt-ridden group through the insolvency process.
Manoj Kumar Agarwal, a resolution professional, on August 13 informed the listing compliance department of the Bombay Stock Exchange (BSE) and the National Stock Exchange about the approval of the resolution plan involving DS Kulkarni Developers.
Agrawal in his letter stated: “The Committee of Creditors (CoC) has approved the resolution plan submitted by Ashdan Properties Pvt Ltd, Classic Promoters & Builders Pvt. Ltd and Atul Builders, with a requisite majority of the voting share as per the Insolvency and Bankruptcy Code (IBC), 2016. You are requested to take the above information on record.”
There were three applications to acquire DS Kulkarni Developers through the insolvency process. Besides the Ashdan-Classic-Atul consortium, Mantra Properties and Developers and the trio of Hemendra Shah, Kanhaiyalal Matani and Ghyanshyam Sukhwani had also submitted bids
In September 2019, the National Company Law Tribunal (NCLT), Mumbai bench, ordered the commencement of corporate insolvency resolution process (CIRP) related to the real estate group under the provisions of the Insolvency and Bankruptcy Code, 2016, on an application filed by Bank of Maharashtra.
“The total liability was ₹2,300 crore and the plan accepted is of ₹827 crore. If this is the situation, then what is the amount the depositors are going to get is a big question,” said advocate Ashish Patankar, counsel for DSK’s son Shirish Kulkarni. The DSK group lawyer Prateek Rajopadhye said, “Most complainants/investors who filed cases against DSK group for alleged cheating under the stringent MPID Act are not going to benefit from purported takeover of DSKDL”
A total claim of around ₹1,750 crore has been made, of which nearly ₹1,050 crore pertains to 12 banks and other financial institutions.
Under Committee of Creditors, institutional financial creditors have 66.7 per cent voting rights, while homebuyers and fixed deposit holders have 17 per cent voting rights
Special public prosecutor advocate Pravin Chavan said, “The consortium must take into account the depositors’ money transferred to the DSDL company.”
The DSK couple was booked for cheating and criminal breach of trust at Shivajinagar police station following complaints from investors. The Kulkarnis were booked under Sections 420 (cheating and dishonestly inducing delivery of property), 406 (criminal breach of trust) and 34 (common intention) of the Indian Penal Code (IPC) and Sections 3 and 4 of Maharashtra Protection of Interest of Depositors (MPID) Act.
RTI activist and Aam Admi Party leader Vijay Kumbhar said, “The entire proposal has received a lukewarm response. The banks which were responsible for the financial imbroglio have not been indicted. Also with this decision, the interests of the small-time depositors have been throttled.”
DSK: Timeline of events
Case: Under 406, 420, 34 of Indian Penal Code and Sections 3 and 4 of Maharashtra Protection of Interest of Depositors filed against DSK and wife on October 28, 2017.
Arrest: The two were arrested from a hotel in New Delhi on the morning of February 17, 2018.
ED attachment: Through a notification dated May 5, 2018, ED attached 459 properties, 276 bank accounts, and 46 vehicles and other valuables of DSK and his businesses worth ₹904 crore.
Chargesheet: On May 17, 2018, a 37,000-page chargesheet was filed against 13 people by EOW, Pune police. On August 13, 2018, a supplementary chargesheet was filed against six people.
