DSK Groups fallout started way back in 2004 says Forensic Audit Report

Three years back on this day victims filed FIR against D S Kulkarni and others. Once upon time D S Kulkarni was blue eyed boy of investors and bankers. DS Kulkarni blames demonetization and recession for his fallout. However forensic audit report in Kolhapur case submitted by S. M. Sonalkar and Co alleges that DSK’s fallout was started long back in 2004 – 2005 itself. The report throws a light on several illegalities of banks, arm length dealings, early warning Signals of financial illness of DSK group companies. The report also alleges that banks excessive illegal lending, obtaining illegal Public Deposits, investing in non-core businesses and thus making diversion of funds and use of Public Deposits and loans for personal benefits put DSK Group in a position of bankruptcy.
 

As per report D S Kulkarni developer’s sale started declining in 2010. Even then they started diverting funds in multiple businesses like Toyota Car Selling outlet Agency, luxury two-wheeler production with foreign collaboration, education sector by establishing International Animation College etc. The banking industry started lending him. Many times, they exceeded the norms and prudent financial appraisal criteria. Thus, the Banks, Non-Banking Finance Companies and Housing Finance Companies jointly provided more funds than those to be invested. The borrowings were more than the project cost. Plus utilizing the name and fame, illegal deposits were collected from the investors.

 

RBI Act bans the uncontrolled entities like individuals, proprietary concerns, partnership firms and Association of persons to collect Public Deposits. To get out of the clutches of SEBI, knowingly and under design, the Public Deposits were accepted below Rs. 100 Crores. So many firms were established by using the brand name DSK. The similar names were used like DSK and Associates, DSK and Asso., D S Kulkarni Construction Pvt. Ltd. As the RBI Act puts ban on advertising so advertising was made in the name of D S Kulkarni Developers Limited. The offices of all entities were situated in same building DSK House at Shivaji Nagar , all had same Phone and Fax numbers and all used same logo.

Chronology of early warning signals of DSK Group’s Fallout

·       2004-2005 

Used TDS collected from payees instead of depositing in Govt account

2007-2008 

Started using TDS collected, instead of depositing in Govt account

Since 2010 Onwards

 No Project except Megh Malhar could be completed as scheduled & promised to Flat Holders.

2010-2011 

Almost all TDS was retained instead of depositing with Govt.

2014 September

Contractors, Suppliers & Amount Payments started being paid indefinitely late.

2015 April

DSK, Vidyanagar, Phase II, Baner, was promised delivery, dates were extended to December 2015, then to March 2016, not honored.

2015 August

Bank of Maharashtra Loans were categorized as SMA-2

2015 23rd September

Company Secretary N V Gopal in diligence report to Syndicate Bank mentioned that company has diverted funds to its subsidiaries Rs. 97.71 Crores.

2015 November

DSK Sadaphuli, Talegaon's possession was promised, was not honored. As promised in December 2013, not honored.

2015 December

Employees’ Salaries could not be paid as scheduled/ was delayed.

2016 13th March

The Kalyan Janata Sahakari Bank Limited sanctioned Quasi-Equity Unsecured Loan Rs. 6 crores.

 2016 10th June

Immediately on, as interest & instalment due was not paid, Bank filed Dispute application

2016 30th April

Punjab National Bank's Loan Rs. 4.62 Cr. became overdue/ unpaid.

2016 31st May

 ICD Crown Securities Loan became overdue/ unpaid.

2016 31st May

Bank of Baroda Loan to H. D. Kulkarni became Overdue/unpaid.

2016 25th July

ICICI Bank granted Term Loan Rs. 75 Crores for DSK Nabhangan Phase VII of Township DSK Vishwa. 

2016 31st July

Punjab National Bank, FDOD, Loan Rs. 4.62 Crore turned NPA on 31st July 2016.

2016 31st August

Bank of Baroda. Loan to H. D. Kulkarni, Rs. 4.40 Crores turned NPA on 31st August 2016.

2016 30th September

ICICI Bank Term Loan 75 Crore was classified as NPA on 30th September, 2016

2016 October

All Projects' Development Work was completely Stopped for want of funds

2016 October

Employee’s Salary payment was delayed by 2 months.

2016 6th \ October

ICICI Bank Term Loan 75 Crore was recalled

2016 11th November

The Syndicate Bank MID corporate Branch Navi Peth Pune Sent letter, "Only second floor slab is completed as against G+ 8 Floors and there is no progress since last visit 23.05.2016."

2016 15th November

ICD Crown Securities, DSK Milkotronics Private Limited. Loan Rs. 2 Crores turned NPA on 15th November 2016.

2016 November

Project DSK Sadaphuli's Flat Holders were promised Possession, could not be completed till this date.

·         Related Stories 

    DSK Scam  

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Officials rejecting RTI pleas should be shown doors, Madras HC

 

Recently contrary to the preamble of Right to Information (RTI) act the practice of rejection of RTI applications by quoting section 8 of  RTI had become a norm. The Public Information Officers (PIO) all over India is rejecting RTI applications without applying mind. However, It appears that the Madras high court has come to the rescue of the bedridden  RTI act. The Madras High Court yesterday passed severe strictures on Public Information officers who mechanically reject the application under RTI. The court was hearing an appeal filed by Time Nadu Public service commission (TNPSC) against the order given by Tamil Nadu State information commission (TNSIC). It further directed the Tamil Nadu Government to issue a circular to all its departments, PSUs & corporations warning about legal consequences of not furnishing information under the RTI Act.   

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Here are some major observations of the court

1.       Nowadays, Officials are used to adopting a tactic answer in a mechanical manner that the information sought for is exempted in the light of Section 8(1)(d) of the Act, without actually ascertaining as to whether the information sought falls within the ambit of the said provision.

2.       Such PIO’s  are unfit to hold the post of Public Information Officer or any other post in connection with the discharge of duties under the RTI Act and they should be shown the doors

3.       Mere pendency of the matter is not a bar to furnish details even if it pertains to the very same case pending before the Court. Unless or otherwise there is an interim order, then the information need not be given for the present till the disposal of those matters

4.       The purpose of enactment of the RTI Act itself is to ensure transparency in all respects. Moreover, a reading of section 8(1)(d)  shows that it relates to commercial confidence, trade secrets, etc., and it does not strictly prohibit the authority concerned from providing other detail.

5.       TNPSC had first decided not to give details and thereafter, searched for relevant provisions.

         In the year 2008 Mr P.Muthian from  Trichirappalli had sought information  on the following points

a)       Total number of vacancies called for the years 2006, 2007 and 2008;

b)      Number of seats allocated to the Backward Community out of the total number of vacancies called for the years 2006, 2007 and 2008;

c)       Number of seats allocated to the Most Backward Community out of the total number of vacancies called for the years 2006, 2007 and 2008;

d)      Out of seats allocated to the Backward Community, the list of the selected candidates from the sub-castes of Muthuraja and Muthriyar;

e)      Out of seat allocated to the Most Backward Community, the list of selected candidates from the sub-castes Ambalakarar;

f) Out of seat allocated to the Most Backward Community, the list of selected candidates from Vanniya Kula Shatriar sub-castes (Vanniyar, Vanniya, Vanniya Gounder, Kandar, Padayachi Palli and Agni Kular Shathriar)."

Except for point ‘C’  TNPSC refused to part with the details citing Section 8 (1)(d) of the RTI Act. It held that since the caste-wise breakup of the selected candidates have got nothing to do with the public activity and such disclosure would amount to an invasion of the privacy of individuals, apart from the creation of communal discontent and strife.

 However, following an appeal, the TNSIC had  ruled that every citizen is entitled to a transparent view of the functioning of public authorities and the trepidation shown by the Public Authority to the demand will not be ground in denying details to the public in contra to the provisions of the RTI Act. TNSIC also ordered to information sought to be provided free of cost.

The court observed that” On close scrutiny of the Preamble and the object of the Act, it is manifestly obvious that the scope of freedom of information has been widely spread with the object and purpose to give the right to information to its citizens in order to ensure transparency in government dealings. From a bare reading of Section 6 of the Act, it is abundantly clear that any person, who desires to obtain information under the Act shall have to make a request in writing to the authority prescribed under the Act. It is not necessary that a person seeking information is a citizen of the country or has a direct interest in the matter. As a matter of fact, the provision of Section 6 confers right to information to any person for the obvious reason that right to information flows from the right to the expression”

The court rejected the contention of TNPSC that the details sought for by the respondent are not at all warranted and that it would amount to an invasion of privacy, saying it, cannot be accepted, especially when the selection itself is based on caste wise quota. The disclosure of caste wise breakup will certainly inure to the benefit of candidates to ascertain as to whether they actually fall under the reservation quota or not. When the general list itself has already been published for public view, as stated in the petition, there is nothing wrong in disclosing the details to the respondent. In the list, the details of caste, including sub-caste have to be necessarily mentioned and the contention that such revelation would create communal disharmony is not acceptable. As long as there is a provision for appointment on the basis of reservation, what prevents the authorities in unearthing those details to the public and when the details sought for by the respondent are furnished, it will throw a clear light / picture as to under what category, a candidate was placed.

The court also observed that the apprehension of TNPSC, that in-depth description of castes will create communal unrest, is only an illusion and imaginary. The court also passed remark that ‘ if it is the real concern of TNPSC and the Government, they should think of abolishing the quota system as well as the removal of a column regarding caste particulars in the school certificate itself, so that the people of Tamil Nadu could stand united under one roof irrespective of caste, creed, religion, etc. at least in the year 2050 and our State will be a model State for the whole of the country’

Coming down heavily on the PIO’s who avoid providing information under the RTI Act (Right to Information Act), the High Court observed that such officials are unfit to hold the post and should be shown the doors.

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Special MPID court rejects bail applications of 3 accused in DSK financial scam

The special MPID court on Tuesday rejected the bail application of 3 accused in DSK financial scam, However, the court allowed bail to D.S.Kulkarni’s brother Makarand Kulkarni. It has been more than 2 years since the real estate developer DS Kulkarni has been in jail along with his wife, son, sister-in-law. Son-in-law, daughter-in-law and others in connection with the Rs. 2,043 crore fraud case filed by the Economic Offences Wing. The special court rejected bail application of Dhananjay Pachpor ( Chief Operating Officer) Anuradha Purandare ( Sister-in-law ) and Kedar Vanjape ( son-in-law). Special Public Prosecutor Pravin Chavan strongly opposed bail applications. 

Dhananjay Pachpor who was working with D.S. Kulkarni Developers Ltd. (DSKDL) on various Posts had applied for bail. While rejecting his bail application Special court observed that though, no proceeding is filed by Directorate of Enforcement (ED)  against any of the accused till to­date  it cannot be said that,   E.D.   has exonerated the present applicant.   Even on the basis of the statement of witness Chaitrali, at this stage, it cannot be concluded that there is no evidence against the present applicant. This cannot be considered a change in circumstances. During the investigation by Pune police, the applicant prima facie appears to have been involved in the deal of land at Fursungi. Apart from this, the statement of investors demonstrates that it was the applicant who induced them for investing in the various projects of the DSK group

While rejecting D.S.Kulkarni’s Sister-in-law Anuradha Purandares’ s bail Court Observed that, it is an economic offence having huge magnitude. Thousand of investors have deposited the amount in the DSK group of companies,   in which the applicant was working in a   high position. Though some accused in this case namely Mr. Ghatpande and Mr Nevaskar are already released on bail. However, the case of the applicant cannot be compared with them as role assigned to the accused released on bail is a different one and the case of the present applicant is more serious than the case of accused who released on bail. 

Kedar Vanjape another accused in DSK Scam has also filed temporary bail as per the directions of the   High Power Committee. Rejecting his bail application Court observed that, the alleged offence is an economic offence.   In view of guidelines issued by   Hon'ble   High   Power Committee, the serious economic offences and offences punishable under the MPID Act are not covered by the said guidelines. 

Considering that the investigation related to   Makarand Kulkarni D.s.Kulkarni’s Brother is completed and considering the role assigned to him in the commission of the offence and his age, keeping him behind the bars for a further period will not add anything more to the prosecution court allowed bail to him. 

Makarand Kulkarni contended that his bank account was operated by Anuradha Purandhare or Hemanti Kulkarni as authorized signatories. He was unaware of the transactions happening in his bank account as they were operated by co­accused Anuradha Purandhare and Hemanti   Kulkarni as a   power of attorney.   Makarand Kulkarni further contended that he signed few cheques only at the instance of main accused and he had blind faith on his brother. 

Related Stories

DSK SCAM

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Maharashtra Government invites consent of SIC applicants as per amended rules of RTI

The Government of Maharashtra has now invited consent as per the amended rules of RTI from the applicants who have already applied for the post of State information commissioners. The general administration department (GAD) had invited applications from candidates for the three posts in Nashik, Pune and Nagpur benches of the State Information Commission (SIC) in June 2019. Accordingly, some have applied for the post of SIC. The state government had also appointed a search committee to shortlist the names of the candidates to be sent to the appointment committee

However, meanwhile, the rules pertaining to Right to Information (Term of Office, Salaries, Allowances and Other Terms and Conditions of Service of the Information Commissioners) were amended. And the entire process of appointment of SICs stopped.

Now the government of Maharashtra has asked all the applicants to furnish the consent letter in the following format as per amended rules.

1. According to the advertisement dated 7th June 2019, I have applied for the post of State Information Commissioner in Maharashtra State Information Commission.

2. Right to Information (Term of Office, Salaries, Allowances and Other Terms and Conditions of Service of the Chief Information Commissioner, Information Commissioners in the Central Information Commission, State Chief Information Commissioner and State Information Commissioners in the State Information Commission) Rules, 2019. Notification on this subject has been published by the Central Government on October 24, 2019. As per the notification dated 24.10.2019, the Central Government has modified the salary, allowances, term of office and other terms and conditions of service of the State Chief Information Commissioner and State Information Commissioners in the State Information Commission.

3. I have taken note of these changes and I agree to maintain the application made and will impress for the post of State Information Commissioner.

The candidates have to send a letter mentioning “Willingness for the post of State Information Commissioner" superscribed on the envelope to Secretary (O&M), General Administration Department, 1st Floor, Mantralaya, Mumbai - 400032 as well as through e-mail to sic-application@gov.in within 15 days from the date of publication of advertisement.

The advertisement in this regard is yet to be published in the newspapers. If the government publishes this advertisement in next 3-4 days it will receive consent letters by 15th March. Then the Search Committee will follow objective criteria for shortlisting of applicants and prepare a panel of such short-listed candidates, along with the criteria applied. It will take suppose month or so i.e. 15^th April.  And after that, the same shall be notified on the website for the appropriate time. Say about a month or so i.e. 15^th May.

Then the short-listed the panel shall thereafter be placed for consideration by the Committee led by the chief minister and this committee make its recommendations to the Governor. It will take say another month. That means if all goes well SIC’s will be appointed by the June end in Maharashtra.

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