DSK group fraud case: Bank of Maharashtra’s top officials held

The Pune police told a local court that these officials had sanctioned the loan to the DSK group company without the approval of other banks, which were part of a consortium.

The police were probing the role of these bank officials for allegedly sanctioning loans to the builder without following due diligence. (File)

By: Express News Service -June 21, 2018

THE ECONOMIC Offences Wing (EOW) of the Pune city police on Wednesday arrested top officials of the Bank of Maharashtra, including its CEO and managing director Ravindra Prabhakar Marathe, in connection with the Rs 2,043-crore fraud case against Pune-based DSK group accused of cheating thousands of its depositors.

Along with Marathe, police also picked up bank’s executive director Rajendra Kumar Vedprakash Gupta, former CEO and MD Sushil Muhnot and zonal manager Nityanand Sadashiv Deshpande on charges of conspiring with the key accused to illegally sanction a loan of Rs 100 crore for a real estate project of a DSK group company.

Police have claimed that the accused bank officials had violated norms and Reserve Bank of India (RBI) guidelines while sanctioning the loan.

Two officials of the D S Kulkarni Developers Limited (DSKDL), chartered accountant Sunil Madhukar Ghatpande and chief engineer and vice-president Rajiv Dullabh Das Nevaskar, were also arrested. While Muhnot was arrested from Ahmedabad, Deshpande was taken into custody from Jaipur. Both were being brought to Pune.

The other four were arrested from Pune and produced before the Shivajinagar special court, which remanded them to police custody till June 27.

In a statement, the Bank of Maharashtra, however, maintained that the loans were sanctioned to the firm “as per the bank’s lending norms”.

“The bank’s total outstanding exposure to M/S D S Kulkarni Developers Limited is to the tune of Rs 94.52 crore, which is fully secured by primary and collateral securities. Recovery process like SARFAESI action has already been initiated by the bank and some of the properties are due for auction. Bank has also declared M/S DSK Developers Limited and its promoters as wilful defaulters,” the statement said.

The promoters of the DSK group, D S Kulkarni and his wife Hemanti, are already in police custody. So are five other office-bearers of the group. Kulkarni’s son, Shirish Kulkarni, and some other family members are also accused in the case.

While seeking custody of the bank officials, the Pune police told a local court that these officials had sanctioned the loan to the DSK group company without the approval of other banks, which were part of a consortium. The consortium included the State Bank of India, United Bank of India, Syndicate Bank, Vijaya Bank and IDBI Bank. Also, the loan amount was supposed to be disbursed in instalments according to the progress in construction. But these precautions were not observed by the bank officials who made changes in the original resolution and illegally passed a new resolution to facilitate the loan of Rs 50 crore, the police claimed.

It added that the arrested bank officials did not check whether the loan amount of Rs 50 crore was being utilised for the purpose for which it was sanctioned. Police have claimed that the loan amount was diverted by the key accused for other purposes.

Further, the police told the court that the bank officials did not act to cancel the loan even after knowing that the DSKDL was not doing well, that in 2016-17, 259 of the total 514 workers in the company had resigned, and that the company had not been paying salaries to its employees since January 2016. It submitted that custodial interrogation of the bank officials was needed to probe their motive behind ignoring precautions.

Regarding the role of the others arrested, the police said Nevaskar, the vice-president of DSKDL, was allegedly involved in purchase of 250 acres for the real estate project in Fursungi. The land was initially purchased in the name of DSK’s relatives and then crores were transferred to the bank accounts of these relatives in 2007-08. It was shown that same land was purchased from them at huge prices. Police said that the income tax department had initiated a probe in this matter and it was suspected the land deals were part of a pre-planned conspiracy to evade short term gains tax. Land deal agreements and other documents were still to be recovered from Nevaskar, it added.

On May 17, a Special Investigation team had filed a 36,875 pages-long chargesheet against builder D S Kulkarni and his wife Hemanti. Police have said that since 2010, the couple had “lured” people into investing money in the schemes of their company by offering attractive returns. Later, these deposits were allegedly diverted into the accounts of family members of Kulkarni and further routed into accounts his own accounts and those of Hemanti and son Shirish.

According to the police, the fraud was worth Rs 2043.18 crore, which included Rs 1083.7 crore taken as deposits and loans from depositors, Rs 711.36 crore in loan from banks and financial institutions, Rs 111.35 crore in debentures and Rs 136.77 crores in misappropriations done in land deal at Fursungi.

It added that besides their public listed company DSKDL, Kulkarni and his wife formed eight more partnership firms — D S Kulkarni & Company, D S Kulkarni & Associates, D S Kulkarni & Aso., D S Kulkarni Enterprises, D S Kulkarni & brothers, D S Kulkarni & sons, DSK & Sons and DSK Constructions.

“Our probe found that employees, address and contact numbers of DSKDL and the eight partnership firms are the same. The income source or business done by the eight partnership firms was nothing. Partnership firms were formed only for collecting the deposits from depositors,” said DCP Sudhir Hiremath. So far, the investigations have revealed that about 45,000 depositors, including senior citizens and women, have been cheated in the scam, he added.

The matter came to light when investigations began following a complaint lodged by a depositor, Jitendra Narayan Mulekar (65) of Kothrud, at the Shivajinagar police station in October last year.