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Tuesday, October 27, 2020

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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