June 9, 2003
Your companies have been liquidated? Get a new name, and a new start.
The Dalal Street Journal (DSJ) group’s founder, Vijaysingh B Padode, did just that. He now operates from the mill-turned-office area in Lower Parel. His new office is called Nine Media & Information Services on the first floor of A-to-Z Industrial Estate.
He’s got a dozen people working for him. When Express came calling, none seemed too excited to talk about how Nine Media was related to DSJ.
| • Money raised from market: Rs 42.45 cr
• Money raised from banks and financial
institutions: Rs 25 cr
• Liquidiation of DSJ Finance: 1998
Padode doesn’t either. At first, after a lot of persuasion, chairman Padode agreed to meet but later cancelled. He preferred to talk through the fax machine. ‘‘We have managed to sustain through the worst,’’ he writes. His investors can’t say the same.
Padode’s story starts with a xerox machine. Before the Dalal Street Investment Journal was launched, there was an eight-page xeroxed newsletter.
In 1991, he jumped into the stock market ring, and raked in the moolah through fixed deposit (FD) schemes and stock market shares of his two main outfits—DSJ Finance Corporation Limited and DSJ Communications Limited. Financial analysts had tipped the group as a ‘‘growing corporation’’ with a ‘‘focussed approach’’, although it started with zero capital or any known product.
During the market frenzy, DSJ Communications shares were worth Rs 150 each, with a high premium of Rs 140. DSJ Finance was on a similar high.
With offices in the suburbs (Andheri) and two more near the city’s financial nerve-centre in Fort and VT, DSJ employees recall a feeling of ‘‘well-being’’ in what seemed to be a highly motivated corporate atmosphere. There were 15 vice-presidents in the DSJ Group, all of who were earning monthly salaries of Rs 1 lakh each. The group diversified into real estate, television (DSJ TV) and also had a capsule programme (DSJ Radio) on All India Radio. There was a plantation scheme in the pipeline. By 1996, the stock marked slumped.
Padode defends himself: ‘‘Unfortunately the projects were ahead of their time.’’
The group had acquired 25-acre prime land in Bangalore and, as per the latest claims, another 400 acres at Karjat near Mumbai. The Bangalore property was purchased by the group company to construct housing complex. Only a part of the property was transferred to DSJ Finance.
By 1997, FD investors started panicking when no mid-term interest was paid. DSJ Finance individually wrote to all their depositors giving a long list of excuses and capped it off with another ‘‘attractive scheme’’ for repayment of deposits but with a repayment period of 21 years at an internal rate of return kept at 18.4 per cent!
Needless to add, that this scheme too flopped. The Reserve Bank of India woke up as late as December and clamped curbs on DSJ Finance Corporation. The company went to the liquidators in 1998.
‘‘The main reason for liquidation of DSJ Finance five years ago was that creditors had filed a winding-up petition which resulted in a court order liquidating the company,’’ says Padode.
Though DSJ Communications is still listed, its share worth is barely 50 paise.
In November 1998, DSJ Communication too approached the Board for Industrial and Financial Reconstruction (BIFR) to be declared sick. BIFR said no, with an explanation: ‘‘It is evident from the audited annual reports that the company was engaged in publication of magazines, all its printing work was done on job work basis and it did not perform any industrial activity,’’ the BIFR order had stated.
R J Fernandes, who invested Rs 25,000 in DSJ Finance shares in 1995, still seethes with anger: ‘‘Only we middle-class people are suffering for investing in company shares of DSJ. What were the concerned authorities doing when people like C R Bhansali, Mehtas and companies like DSJ were playing the market?’’ He hasn’t got a paisa back.
» A house on Malabar Hill slams the door on Enarai dreams
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.