DSK Group cheating case: A 30-year-long success story that went wrong
Hailing from a middle-class family with no business legacy, Kulkarni established an empire that was spread over many sectors — real estate, education, entertainment, travel, hospitality, dairy, and power.
6 min read
D S Kulkarni and his wife outside the Bombay High Court (Express Photo by Ganesh Shirsekar/File)
A formidable name in Pune’s real estate sector, D S Kulkarni liked to flaunt his typical rags-to-riches story. “When a young boy from a middle-class family took his first step towards self-reliance, little did people realise that one day, he would have an empire of his own. Selling vegetables at an early age, doing odd jobs, he saved for his education; the seeds of hard work and honesty were slowly being nurtured for the future,” reads his profile on his group’s website. “DSK’s Midas touch needs no lodestone to measure the purity of gold that he endlessly creates with all his ventures,” it says.
During his good times, Kulkarni used to narrate his own stories during ‘motivational speeches’, exhorting people to take to entrepreneurship. One of his often-repeated anecdotes was about how he had started a telephone instrument company and how even in the most mundane jobs, he tried to give something extra. DSK did have a lot to feel proud of. Hailing from a middle-class family with no business legacy, Kulkarni established an empire that was spread over many sectors — real estate, education, entertainment, travel, hospitality, dairy, and power. He also delved in financial schemes, offering attractive 10-12 per cent fixed deposit returns that got him over 8,000 subscribers. The fixed deposit scheme had been running for more than 30 years, and till October 2016 ,there had never been a default in payment.
DSK Group’s collaboration with Japanese automobile manufacturer Toyota had made it the sole player servicing a niche market. Kulkarni’s son Shirish headed the group’s joint venture with Italian superbike manufacturer Beneli. The group also has presence in education and hospitality sectors. The real estate arm of the company has projects in Pune, Mumbai, Bengaluru and the USA. Trouble for the businessman started in the middle of 2016 after Kulkarni narrowly escaped an accident on the Pune-Mumbai Expressway. He got away with a few injuries but his driver died on the spot.
In October of 2016, the group defaulted on its payments to fixed deposit holders. The realtor blamed this default on the slowdown of his real estate business, which, he said, was because of “the news about my accident spreading panic in the market.”
As the payments stopped for subsequent months as well, the depositors got restive and some of them protested outside the builder’s office on the busy Jangli Maharaj Road. A few of them also approached RTI activist Vijay Kumbhar, who started blogging about the company’s deals. In his first blog, Kumbhar had alleged that the fixed deposit scheme run by Kulkarni did not have sanction of the Reserve Bank of India. He also alleged shady land deals by his family members at the expense of the public listed company, DSK Developers Limited (DSKDL).
In a press conference in Pune in November, Kulkarni refuted these allegations. But by that time, news had started trickling in of the company’s attempts to offload its Toyota arm, in order to raise money to pay the depositors. Work in many of the ongoing projects were also stalled, with flat buyers threatening to go to the police against the builder. In the meantime, depositors, many of them senior citizens, organised themselves and contemplated legal action.
In October, the first of the many FIRs against the builder was filed with the Pune City Police. The Economic Offences Wing wrote to the Inspector General of Registration, asking it to keep the police informed in case the company made any property transfers. Two more FIRs followed.
Construction on the company’s DSK DreamCity project, a 8,000-crore integrated township spread over 300 acres of land on the Pune-Solapur Road, came to a halt, amid allegations of unfair land deals by his family members. Surrounded by problems from all sides, Kulkarni blamed circumstances — the slowdown in real-estate sector and demonetisation — for his company’s woes. But he kept assuring his investors that he was not running away and would pay back all their dues. He even got MNS chief Raj Thackeray to support him. Thackeray held a meeting with protesting depositors in November and asked them to trust the builder. He claimed that ‘non-Marathi businessmen backed by politicians’ were trying to destroy Kulkarni.
In his press conference in November, Kulkarni had said, “If you take the assets of the construction group, it amounts to above Rs 9,000 crore, and our dues hardly stand at Rs 1,500 crore. The total dues of the fixed deposit holders is only Rs 589 crore, which is due in 2020. So there is no question of not paying them”. “We have made a plan for timely payout of our deposit holders and once the court gives us the green signal, we will start…,” he had claimed. But when the courts did ask him to pay, all he offered was promises. On December 4, he told the Bombay High Court he would pay Rs 50 crore as security within 15 days. After that, he managed to obtain a further four-weeks’ time from the Supreme Court. In the third week of January, the company told the Bombay High Court that the amount was being transferred from a bank in Singapore. It claimed that the transaction had already been initiated and would be credited to its domestic accounts within three days. That also turned out to be a false assurance.
Kulkarni held another press conference on February 8, this time claiming that his company was in the process of raising money through crowdfunding. On Thursday, the Bombay High Court finally decided that enough was enough and that it could not trust DSK any further. It withdrew its protection from arrest it had granted to the builder all this while, and within hours, the Pune Police nabbed him from Delhi.
You May Like
Photos
