Deepak Sakharam Kulkarni, known as ‘DSK’, a ‘reputed’ builder has gone down the road rather rapidly.
The complaints against Deepak Sakharam Kulkarni, known as ‘DSK’ and his family are not only civil in nature but criminal and can be categorized into two.
Category 1: Fixed Deposits: Failure to pay to the depositors:
DSK has defaulted in repayment of deposits collected from the gullible depositors. It is reported that only one company “D S Kulkarni Developers Limited” is registered with SEBI and RBI (as NBFC) for accepting deposits from public. None of his other companies has been registered with SEBI and RBI for accepting deposits from public. Most of the depositors holding dud cheques showed the cheques were issued by DSK’s private firms DSK & Sons, DSK & Associates, etc. etc. How these deposits were routed to his companies registered under the Companies Act is another aspect of investigation.
This is a criminal offence under the Companies Act, RBI Act and SEBI Act. DSK has also violated Maharashtra Protection of Interests of Depositors (in Financial Establishments) Act, 1999.
Bombay HC vide order dated 04/12/2017 has asked him to deposit Rs.50 crore within 4 weeks. DSK has gone to SC and got reprieve on 22/12/2017 to deposit the same by 22/01/2018. In all probability, DSK will fail to deposit the said amount in Bombay HC and faces imminent arrest as Bombay HC has made it clear that if the applicants fail to deposit the said amount within stipulated time, the interim relief granted shall stand automatically vacated without any further reference to the Court. The Supreme Court has not disturbed this condition while extending the time limit to 22/01/2018.
This aspect has been widely reported in media and the people are aware of it. Almost all properties are mortgaged with banks and financial institutions. It is reported that DSK does not have any free property to dispose off and deposit the money in the High Court.
Category 2: Misappropriation of fund, cheating, criminal breach of trust, etc. etc. of flat buyers:
I will discuss this category of complaint with one example for the sake of brevity.
DSK has declared one housing scheme in 2013-2014 known as “DSK Nandanvan” to be constructed at G. No. 127/128 of Village Pirangut, Taluka Mulshi, Dist. Pune comprising of about 190 flats.
As per the scheme, the flat purchaser was to pay only 10% of the purchase price of the flat. The balance amount was to be arranged from pre-approved loans from Tata Capital Housing Finance Limited and/or HDFC Bank Limited. The EMI on the said loans were to be paid by DSK till the possession was handed over to the flat buyers and the buyer would be required to pay the EMI only after getting the possession of the flat.
Believing in this scheme that was published widely, number of persons entered into the flat buyer’s agreement by paying only 10% of the cost plus stamp duty and registration. Tripartite agreements with the said financiers were also executed for disbursement of loans to DSK as per the schedule specified in the flat buyer’s agreement. The possession of the said complex was stated to be on 30/06/2017.
When the flat buyers approached DSK for possession in June 2017, DSK bluntly told the flat buyers that the said scheme could not be completed because of financial crunch and DSK would hand over the possession only after completion of construction that he is unable to do in view of financial problems.
Meanwhile, the flat buyers received notices form the Tata Capital and/or HDFC Bank as the case may be, to pay the EMIs, further threatening legal action against the flat buyers, who were the borrowers, in case of default.
The flat buyers say that the construction of the said ‘DSK Nandanvan” is not even 30% complete. In some cases, only grass is cut and pits are dung for foundation etc. etc. However, the entire loan amount is disbursed by Lender Financial Institutions. When the angry flat buyers confronted the officials of Tata Capital Housing Finance Limited, they were evasive in their replies clearly indicating their complicity in this sordid financial mess. It is learnt that even a retired District Judge has become a victim in this complex that is ironically named “Nandanvan”!
The following points come up to establish absolute fraud.
1. It is not disputed that payments to DSK was to be made progressively on completion of various stages.
2. How did the financial institutions/NBFCs disburse entire loan without checking the progress of the construction?
3. Whether Tata Capital Housing Finance Limited had verified Architect’s certificate regarding progress of construction?
4. If there is any such certificate, will it not amount to professional misconduct on the part of the said Architect, besides he being the party to this alleged fraud?
5. If Tata Capital Housing Finance Limited has not bothered to ask for such progress certificate, does it not reflect connivance and complicity of Tata Officials with DSK to defraud the borrowers?
6. When DSK has received 100% amount from flat buyers, (10% initial booking amount and 90% loan disbursement), what is the reason for the said project remaining in doldrums?
7. Does it not establish that DSK has used this amount somewhere else resulting into cheating, criminal breach of trust, financial misfeasance, fraud and misappropriation of funds?
The category 2 fraud is not yet widely reported. It is alleged by the affected flat buyers that false and fabricated documents have been made, thus pointing to another angle of forgery of valuable security. It is an enigma how this aspect has been missed by DSK’s statutory auditors M/s. Gokhale, Tanksale & Ghatpande, Chartered Accountants during FY 2015-16. The audit Report for FY 2016-17 is not yet filed with ROC office by the Company.
The entire fraud needs to be investigated. The money trail needs to be looked into to see where the money has gone. When DSK has received 100% of the flat price in DSK Nandanvan, there is no reason for the project to be left incomplete. There is obvious diversion of funds. The matter is complicated particularly when DSK has around 32 companies registered under the Companies Act where either he or his wife or son or daughter-in-law is a Director and one LLP where his wife is a partner.
The road ahead is quite bumpy. Just D S Kulkarni Developers Limited has bank borrowing of Rs.1,498 crore. Not to speak of several hundred crores of deposits collected from public. The dealings of D S Kulkarni Developers Limited with two of its associate concerns M/s. D S Kulkarni & Company (where wife Mrs. Hemanti Deepak Kulkarni and son Shrirish Deepak Kulkarni are partners), D S Kulkarni & Associates, another partnership firm where again wife and son are partners, corporate guarantee of Rs.108.84 crore given to Bank for loans extended to DSK Global Education and Research Limited (known as DSK Global, where his wife, son and daughter-in-law are Directors) and joint development of a land with DSK Global where flats admeasuring 1,15,346 sq. feet along with allotted car parking were given to DSK Global as sales consideration for land owned by DSK Global need forensic scrutiny to ascertain whether any fund diversion has taken place. DSK Global on its own has bank loans of Rs.342.50 crore.
DSK Developers Limited’s investment in two subsidiaries in USA, namely DSK Developers Corporation and DSK Woods LLC in New Jersey, USA and provision of Rs.11.14 crore towards doubtful advances and Rs.5.10 crore towards investment impairment during one FY 2015-16 also need scrutiny.
On 6th August 2017, Pune’s well-known activist Vijay Kumbhar had organized a seminar at Chittaranjan Vatika. Among those seeking his help were a group of DSK investors who are working to dig deep into the reason for the company’s financial problems. These findings have been posted by Vijay Kumbhar in his blog titled ‘DSKDL public limited company or Criminal Enterprise’. Every bit of information, backed by copies of sales deeds, share certificates and other documents, paints a murky picture of forged signatures, dual identities, rampant diversion of funds from the public company to DSK’s relatives, merger of loss-making family firms at inflated valuation and worse.
What is coming out in public domain is certainly serious. The legal notices being issued by flat buyers in DSK Nandanvan to DS Kulkarni Developers Limited and Tata Capital Housing Finance Limited levy serious allegations. It is going to be a herculean task for investigating agencies. Investigation by EOW would be a failure. Matter needs to be handed over to CBI and ED.
DSK certainly has traveled to the wrong side of law. Going to politicians and doing theatrics in the media is a testimony in this regard.
DSK Empire has collapsed.
(Originally published in www.frontlinetoday.net on January 5, 2018)
The complaints against Deepak Sakharam Kulkarni, known as ‘DSK’ and his family are not only civil in nature but criminal and can be categorized into two.
Category 1: Fixed Deposits: Failure to pay to the depositors:
DSK has defaulted in repayment of deposits collected from the gullible depositors. It is reported that only one company “D S Kulkarni Developers Limited” is registered with SEBI and RBI (as NBFC) for accepting deposits from public. None of his other companies has been registered with SEBI and RBI for accepting deposits from public. Most of the depositors holding dud cheques showed the cheques were issued by DSK’s private firms DSK & Sons, DSK & Associates, etc. etc. How these deposits were routed to his companies registered under the Companies Act is another aspect of investigation.
This is a criminal offence under the Companies Act, RBI Act and SEBI Act. DSK has also violated Maharashtra Protection of Interests of Depositors (in Financial Establishments) Act, 1999.
Bombay HC vide order dated 04/12/2017 has asked him to deposit Rs.50 crore within 4 weeks. DSK has gone to SC and got reprieve on 22/12/2017 to deposit the same by 22/01/2018. In all probability, DSK will fail to deposit the said amount in Bombay HC and faces imminent arrest as Bombay HC has made it clear that if the applicants fail to deposit the said amount within stipulated time, the interim relief granted shall stand automatically vacated without any further reference to the Court. The Supreme Court has not disturbed this condition while extending the time limit to 22/01/2018.
This aspect has been widely reported in media and the people are aware of it. Almost all properties are mortgaged with banks and financial institutions. It is reported that DSK does not have any free property to dispose off and deposit the money in the High Court.
Category 2: Misappropriation of fund, cheating, criminal breach of trust, etc. etc. of flat buyers:
I will discuss this category of complaint with one example for the sake of brevity.
DSK has declared one housing scheme in 2013-2014 known as “DSK Nandanvan” to be constructed at G. No. 127/128 of Village Pirangut, Taluka Mulshi, Dist. Pune comprising of about 190 flats.
As per the scheme, the flat purchaser was to pay only 10% of the purchase price of the flat. The balance amount was to be arranged from pre-approved loans from Tata Capital Housing Finance Limited and/or HDFC Bank Limited. The EMI on the said loans were to be paid by DSK till the possession was handed over to the flat buyers and the buyer would be required to pay the EMI only after getting the possession of the flat.
Believing in this scheme that was published widely, number of persons entered into the flat buyer’s agreement by paying only 10% of the cost plus stamp duty and registration. Tripartite agreements with the said financiers were also executed for disbursement of loans to DSK as per the schedule specified in the flat buyer’s agreement. The possession of the said complex was stated to be on 30/06/2017.
When the flat buyers approached DSK for possession in June 2017, DSK bluntly told the flat buyers that the said scheme could not be completed because of financial crunch and DSK would hand over the possession only after completion of construction that he is unable to do in view of financial problems.
Meanwhile, the flat buyers received notices form the Tata Capital and/or HDFC Bank as the case may be, to pay the EMIs, further threatening legal action against the flat buyers, who were the borrowers, in case of default.
The flat buyers say that the construction of the said ‘DSK Nandanvan” is not even 30% complete. In some cases, only grass is cut and pits are dung for foundation etc. etc. However, the entire loan amount is disbursed by Lender Financial Institutions. When the angry flat buyers confronted the officials of Tata Capital Housing Finance Limited, they were evasive in their replies clearly indicating their complicity in this sordid financial mess. It is learnt that even a retired District Judge has become a victim in this complex that is ironically named “Nandanvan”!
The following points come up to establish absolute fraud.
1. It is not disputed that payments to DSK was to be made progressively on completion of various stages.
2. How did the financial institutions/NBFCs disburse entire loan without checking the progress of the construction?
3. Whether Tata Capital Housing Finance Limited had verified Architect’s certificate regarding progress of construction?
4. If there is any such certificate, will it not amount to professional misconduct on the part of the said Architect, besides he being the party to this alleged fraud?
5. If Tata Capital Housing Finance Limited has not bothered to ask for such progress certificate, does it not reflect connivance and complicity of Tata Officials with DSK to defraud the borrowers?
6. When DSK has received 100% amount from flat buyers, (10% initial booking amount and 90% loan disbursement), what is the reason for the said project remaining in doldrums?
7. Does it not establish that DSK has used this amount somewhere else resulting into cheating, criminal breach of trust, financial misfeasance, fraud and misappropriation of funds?
The category 2 fraud is not yet widely reported. It is alleged by the affected flat buyers that false and fabricated documents have been made, thus pointing to another angle of forgery of valuable security. It is an enigma how this aspect has been missed by DSK’s statutory auditors M/s. Gokhale, Tanksale & Ghatpande, Chartered Accountants during FY 2015-16. The audit Report for FY 2016-17 is not yet filed with ROC office by the Company.
The entire fraud needs to be investigated. The money trail needs to be looked into to see where the money has gone. When DSK has received 100% of the flat price in DSK Nandanvan, there is no reason for the project to be left incomplete. There is obvious diversion of funds. The matter is complicated particularly when DSK has around 32 companies registered under the Companies Act where either he or his wife or son or daughter-in-law is a Director and one LLP where his wife is a partner.
The road ahead is quite bumpy. Just D S Kulkarni Developers Limited has bank borrowing of Rs.1,498 crore. Not to speak of several hundred crores of deposits collected from public. The dealings of D S Kulkarni Developers Limited with two of its associate concerns M/s. D S Kulkarni & Company (where wife Mrs. Hemanti Deepak Kulkarni and son Shrirish Deepak Kulkarni are partners), D S Kulkarni & Associates, another partnership firm where again wife and son are partners, corporate guarantee of Rs.108.84 crore given to Bank for loans extended to DSK Global Education and Research Limited (known as DSK Global, where his wife, son and daughter-in-law are Directors) and joint development of a land with DSK Global where flats admeasuring 1,15,346 sq. feet along with allotted car parking were given to DSK Global as sales consideration for land owned by DSK Global need forensic scrutiny to ascertain whether any fund diversion has taken place. DSK Global on its own has bank loans of Rs.342.50 crore.
DSK Developers Limited’s investment in two subsidiaries in USA, namely DSK Developers Corporation and DSK Woods LLC in New Jersey, USA and provision of Rs.11.14 crore towards doubtful advances and Rs.5.10 crore towards investment impairment during one FY 2015-16 also need scrutiny.
On 6th August 2017, Pune’s well-known activist Vijay Kumbhar had organized a seminar at Chittaranjan Vatika. Among those seeking his help were a group of DSK investors who are working to dig deep into the reason for the company’s financial problems. These findings have been posted by Vijay Kumbhar in his blog titled ‘DSKDL public limited company or Criminal Enterprise’. Every bit of information, backed by copies of sales deeds, share certificates and other documents, paints a murky picture of forged signatures, dual identities, rampant diversion of funds from the public company to DSK’s relatives, merger of loss-making family firms at inflated valuation and worse.
What is coming out in public domain is certainly serious. The legal notices being issued by flat buyers in DSK Nandanvan to DS Kulkarni Developers Limited and Tata Capital Housing Finance Limited levy serious allegations. It is going to be a herculean task for investigating agencies. Investigation by EOW would be a failure. Matter needs to be handed over to CBI and ED.
DSK certainly has traveled to the wrong side of law. Going to politicians and doing theatrics in the media is a testimony in this regard.
DSK Empire has collapsed.
(Originally published in www.frontlinetoday.net on January 5, 2018)
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