The economic offence wing of the Pune City Police on Thursday carried out raids at five properties of DS Kulkarni Developers in Mumbai and Pune after the developer had defaulted on repayment of debt. The police searched the residences of chairman and director DS Kulkarni and his wife Hemanti Kulkarni and their offices in Pune and Mumbai. Seizure of documents and evidences was going on till late evening. Around 351 depositors approached the EOW after DSK had defaulted on repayments of their dues and filed complaints against the builder. A case of cheating was registered by the EOW at the Shivajinagar police station. The search was part of the ongoing investigations, the Pune Police said.
The company has not been able to service its secured redeemable NCDs since June 2017 and DSK admitted that it would not be able to make payments owing to prevailing financial crunch. DSK’s fixed deposits outstanding of Rs 33.86 crore was rated ‘D’ after a re-rating. Similarly, secured redeemable NCDs of Rs 111.59 crore got a ‘D’ rating. In August, the company’s chartered accountants said in the audit report that during the quarter under review there had been delays in repayments of installments of borrowings obtained from financial institutions and payment of interest thereon.
“In case of some borrowing, such delays have continued for a period exceeding 90 days. There have also been defaults in payment of statutory dues, delays in payment of staff salaries. The company’s credit rating has been downgraded to ‘D’. These factors cast significant doubt on the company’s ability to continue as a going concern,” the report said. The company said it was putting in place financial restructuring plans and making changes in the management. DSK postponed holding of the AGM by two months. The AGM was scheduled for September 29. The company was given two-month extension to hold the AGM but is yet to announce the date.
DSK’s managing director DS Kulkarni stepped down and his son Shirish Deshpande took over as the MD in September. The DSK board meeting held on October 3, 2017 discussed the plan for repayment of interest and maturity of debentures. The company told the exchange that it was negotiating for disposing of its surplus land holding and was in the process of liquidating personal business assets. The company also claimed to have received an in-principle sanction letter for loan which will help it complete a few construction projects and get residential units ready for sale or the receive balance payments of residential units already sold.