‘Our assets including land holdings are worth Rs 9000 crore’

We are currently facing a cash crunch, nothing else. It is a temporary phase and we hope to come out of it by January next year, says DS Kulkarni.

pune Updated: Aug 18, 2017 11:27 IST
Yogesh Joshi
Yogesh Joshi
Hindustan Times, Pune
DS Kulkarni. (HT PHOTO)

Once known as the most credible face among real estate players, the DSK Group is currently in a serious financial state. This has led to panic amongst the company’s fixed deposit holders. Problems only worsened after the group defaulted, multiple times, on paying returns on FDs. Yogesh Joshi spoke to DS Kulkarni, Founder, Chairman and Managing Director, DSK Developers Limited, about the ongoing crisis. Excerpts from the interview

Q. DSK group is currently in financial problems. Can you please tell what exactly has happened?

We are currently facing a cash crunch, nothing else. It is a temporary phase and we hope to come out of it by January next year. I have been working with 8,000 partners who are mostly middle-class people. For 36 years, I have distributed business profit among these deposit holders. It has benefited me in my business. Till October 2016, everything was fine as we returned money to every investor on time

Q. So what went wrong?

ANS: The problem began since January 2016 when real estate started facing a slowdown. As the sentiments became negative, problems escalated. Later, I met with an accident which created panic among FD holders as they started coming to our office for their money under the impression, that, what will happen to them after me? Many of them are senior citizens. While the slowdown brought down the demand of flats, my accident complicated the matter as people started demanding money.

Q. What did you tell your FD holders?

ANS: While we were facing problems, even in such a situation, we paid ₹ 250 crore to assure the investors. In such a situation, we took out money from our side of the business, such as Toyota, and shifted it to the construction business.

Q. Despite efforts you could not salvage the situation.

ANS: While our business was coming on track the government announced demonetisation. It hurt us severely as it brought down the prices of flats. Some people leaked my video in which I was telling my staff not to issue cheques if there is no balance in the bank accounts. While I was right in saying what I said, people misinterpreted that assuming the DSK Group is in crisis, leading to cancellation of flats. The result was there was no working capital left.

Q How much money have people have deposited with you?

ANS: The money with us through FD is somewhere around ₹ 485 crore while our assets including our land holdings is worth ₹ 9,000 crores. The assets are 10 times more than the money we have raised from the market.

Q Did the Dream City project contribute to the crisis?

ANS: No. On the contrary, it’s our Dream City project which is helping us now financially as we try to come out of this bad phase. Dream City is the strong project. It has got a good response

Q So what are the measures you are taking to come out of this crisis?

ANS: We are trying to raise money from foreign investors. The talks are in last stage. We have also put up two of our land stocks on sale to raise money. We are taking every effort to return the depositors’ money.

Q. Currently how many projects have you undertaken?

ANS: We have in total 21 projects. Of which 13 projects were put on hold due to the financial crunch. We are planning to restart these 13 projects. These 13 projects account for construction worth 48 lakh square feet. We hope to get ₹3,700 crore once we sell these projects.

Q Any message you would like to give to investors?

ANS: We are making all possible arrangements to return the money. I would appeal to the FD holders not to panic and trust us. You will see visible changes in the coming days.

First Published: Aug 18, 2017 11:27 IST