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Pune’s DS Kulkarni case: Justice in slow lane, investors in a jam
It has been 15 months since the real estate developer DS Kulkarni has been in jail along with his wife and son, in connection with the Rs. 2,043 crore fraud case filed by the Economic Offences Wing. What is the progress in this case? Shalaka Shinde and Yogesh Joshi report
It has been 15 months since Pune-based real estate developer Deepak Sakharam Kulkarni, popularly known as DSK, is behind the bars. The arrest of self-made billionaire, who is looking frail these days during the court proceedings, may have initially cheered hundreds of investors who are awaiting their hard-earned money, but the long and complicated legal process has only extended their wait.
Founder and chairman of the DS Kulkarni Developers Ltd (DSKDL), Kulkarni, 70, along with wife Hemanti, 58, was arrested by Pune police from a hotel in New Delhi on the morning of February 17, 2018 in a multi-crore cheating case. DSK’s son Shirish Kulkarni surrendered in a local court on June 25, 2018. On May 16, 2018, DSK’s niece Sai Vanjpe and her husband Kedar Vanjpe were arrested along with Dhananjay Pachpor, the chief operating officer of DSKDL.
After DSK and many of the immediate family members were sent behind the bars, most of the business ventures have been shut and employees are giving up hope on pending salaries. With DSK Developers Ltd being the flagship company, the group controlled several ventures having interest in real estate, automotive, education, Information technology (IT), hospitality, and sports.
“Since everyone from the family is in jail, for now every business they were involved in is on hold,” said Nilesh More, assistant commissioner of police, EOW, Pune police, who is investigating the case.
If the Yerawada prison has made life difficult for DS Kulkarni, situation of many investors outside is equally bad.
The impatience has grown among most investors, who had put in their life savings in various schemes run by DS Kulkarni , expecting bright returns. During one of the hearing in March this year, an investor shouted at DSK’s wife Hemanti in the courtroom blaming the latter for her husband’s death. The judge had to ask staff to take depositors away.
“Some of the old investors have died. There are a few on death-bed. There are multiple others who are left without the money they had invested,” said Vijay Kumbhar, activist, who led the protest against the developer, finally resulting in his arrest.
Life in Jail
In the case of DS Kulkarni, his health has visibly deteriorated, said his lawyer Srikant Shivade. Inside the prison, the developer has been kept in a separate cell. “They (DSK family) only speak to each other when brought to court. I cannot speak with them outside the court. The family is getting no special treatment.” said Shivade.
It was four years ago that DS Kulkarni was at the peak of his business. The hey-days 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. To finance the project, DSK started raising money through bank loans and deposits from citizens, who were promised higher interest compared to the market rate.
Chargesheet
According to the chargesheet, there are at least 33,000 depositors identified with 6,792 complaints filed against DS Kulkarni in various parts of Maharashtra including Pune, Mumbai and Kolhapur.
DS Kulkarni , according to the chargesheet, had raised Rs 1,083 crore through unsecured loans from bank and financial institutions, deposits and debentures. The probe also revealed complex web of money flow and siphoning off large sums, as revealed in the supplementary chargesheet.
Depositors lose money
His arrest paused the development at Dream City and other real estate projects in Pune and parts of Maharashtra. Gautum and Smita Potdar, residents of Mumbai who are in their sixties, had played a huge gamble by investing in DSK projects, based on the goodwill that DS Kulkarni had gathered over the years.
“I held a private job and post-retirement, I invested all my retirement money in DSK projects because they offered better interest rates than the banks. My brother had also invested and had gained returns; I had heard about DSK for 36 years,” said Gautum Potdar.
For a year Potdar received dividend. But all at once, the system collapsed and the money stopped. “With no pension and no money left, we are selling off whatever little we have to survive. My daughter studies in Kandivali and I cannot afford to give her Rs 20 for the daily bus ride. We live on money sent by my sister. We have to ignore our medical conditions,” said Potdar.
DS Kulkarni’s justification
In a press conference, weeks before his arrest, DS Kulkarni had justified his financial conditions with an accident he had met with, demonetisation, and the market situation thereafter. Among other things, Kulkarni claimed that these reasons cascaded into his current financial situation.
The police, meanwhile, are left with mounting number of court applications and a major investigation that has increasing number of facets with passing months. “We have already filed two chargesheets. There are 71 applications pending in court in this matter. The judge (judge Murumkar) was also transferred so a new judge will take over. Once the matter is handed over to the Enforcement Directorate (ED), cases from Pune, Mumbai, Kolhapur and all other places will be streamlined,” said More.
Woes of investors, depositors
In a domino effect of the DS Kulkarni case, the people who had brought properties in the DSK construction projects which were underway during his arrest, are now left without the money, they had invested. Moreover, the people are left with unpaid home loans without a home to show for it. Hindustan Times has published reports about people who bought homes in the Pirangut projects as well as the ambitious Tower-35 project by DSK using home loans and financing. The home-buyers are now facing the uncalled for consequences of not repaying home loans.
“I’m an IT professional working for a bank (in Pune). When I was changing my job, my prospective employer told me that I could not get the job as my credit score (CIBIL score) was low. I found out that the non-payment of the loan against my investment in the Pirangut project had affected my score. I had to pay Rs 9 lakh to settle my credit score in order to get the job,” said, Prafulla Waghmare, 35 during an earlier interaction in March when police initiated probe into DSK’s housing scheme in Pirangut
Meghshyam Mahimkar, 76, a resident of Virar, Mumbai, had invested Rs 1,90,000 in the form of fixed deposit with DSK projects. “I lost my wife in January. That was a huge tragedy in my life. There are people who have lost their parents, relatives while waiting for money from DS Kulkarni. I have written to the president of India and received an acknowledgement from his office. The letter is about disbursing money to the handicap and aged victims of the DSK scam,” he said. “I had six FDs with DSK. I only got Rs 13,696 in return in one transaction on October 6, 2017,” said the senior citizen who used to work as an electrician.
