A large number of investors, fixed deposit (FD) holders and new home buyers are eagerly waiting to hear positive news about their investments with the prominent Pune-based real estate firm, DS Kulkarni Developers Limited (DSKDL).
City-based real estate blogger Ravi Karandeekar feels that the current financial crisis at DSK will affect the real estate market.
“This is the end of the old era and the beginning of the new regulated real estate industry,” he said while speaking to Hindustan Times.
According to him, for the last four years, DSK was coming out with some booking scheme or event considered illegal by the Reserve Bank of India (RBI).
“RBI has clearly stated that one cannot sell homes to those who cannot afford it. They also state, don’t go for advanced disbursement of loans, don’t go for 20/80 schemes, but DS Kulkarni was particularly targeting the young generation of flat buyers who didn’t have enough money to pay 20 per cent of the down payment, or those people who cannot afford to pay EMIs as well as rent till they got possession, in approximately three to four years. DSK, with the help of private banks, launched schemes like ‘Adhi Ghar Paise Nantar’ (House First, Money Afterwards), or a scheme like DSK’s ‘Master Plan’, and were collecting bookings in big chunks even before construction began,” Karandeekar said.
DSK’s strategy revolves around targeting those who cannot afford a home within PMC or PCMC limits. For these target customers, DSK launched projects in places like Pirangut. For investors from Mumbai who wanted to invest in second homes or retirement homes, DSK launched projects in Talegaon.
Karandeekar cites a project in Talegaon, ‘Sadafuli’, and three projects in Pirangut as examples.
“The kind of hope that DSK had shown the new buyers is now shattered. Buyers who have booked homes with DSK are without a home and have lost their investments, but thanks to RERA (Real Estate (Regulation and Development) Act, 2016), these new buyers can now get justice.
“With DSK starting the trend of mass booking at the launch of a project or at a special promotional event, he made it a practice of accepting booking amounts without any due diligence,” the Pune real estate watcher said, adding that this practice will now stop.
Well-known RTI activist Vijay Kumbhar said murmurs about a brewing financial crisis at this real estate conglomerate began surfacing about two months ago when he started getting calls during a session at RTI Katta, a public platform where people share their grievances and problems and find solutions by sharing information with each other.
“People first came to meet me with documents stating that they were not getting money on the FDs they had invested,” he said.
Kumbhar, who is known for painstaking work in gathering documents through the use of RTI said he began investigating into the DSKDL project Dream City, its survey numbers, and the manner in which the land was purchased.
Around 2007, DSKDL started developing a Special Economic Zone (SEZ) but later on converted the same to a 181 acre township at Fursungi, Pune (now known as Dream City). The entire land purchase transaction as revealed by various documents is something that Kumbhar feels needs deeper investigations.
Likewise, it needs to be examined whether DSK Group companies which recived FDs, have RBI’s permission to accept deposits from the public.
According to him, there are more than 8,000 FD holders who have invested in the DSK Group out of sheer faith and goodwill in the promoter whose rise in life has been legendary. Many of these FD holders are now waiting for their money to be returned; some of them, since 2010.