'The amount involved could as high as Rs 3,500 crore as there are a lot of depositors.'
'Yesterday, I met an investor who put in Rs 4 crore. That man doesn't have Rs 2,000 to spend on medicines.'
In 2014, DSK Developers, a leading entity in Pune's real estate sector, launched the DSK Dream City township project at Loni on the Pune-Solapur highway.
The project involved 12,000 residential units and was worth Rs 8,000 crore (Rs 80 billion).
The first phase of Dream City was to have been handed over to buyers in December 2017.
But trouble had already begun for the group, helmed by D S Kulkarni, in October 2016, when it defaulted on payments to its fixed deposit holders, which the company blamed on the slowdown in the realty sector.
This was when the matter caught RTI activist Vijay Kumbhar's attention.
In October 2017, after his real estate projects stalled, cases were registered with the Pune police against D S Kulkarni.
In December 2017 he told the Bombay high court that he would pay back Rs 50 crores (Rs 500 million), but didn't.
In January 2018, the company told the court that the amount was being transferred from overseas, but it didn't happen.
In February 2018, Kulkarni told the court that money was being raised through crowd-funding and would be returned, but again it was not to be.
The high court then cancelled Kulkarni's anticipatory bail and ordered his arrest.
Following this, on February 17, the chairman and managing director of DSK Developers was arrested by the Pune police in Delhi.
As investigations continue into the alleged fraud, more skeletons tumbled out of DSK's cupboard.
The latest being the June 20 arrest of the current and former chairman and managing directors and four other officials of the Bank of Maharashtra, on charges of sanctioning loans illegally to DSK despite the many irregularities.
"Around 10,000 people have lost money," RTI activist Vijay Kumbhar, below, left, tells Rediff.com's Syed Firdaus Ashraf.
What is the Rs 2,043 crore (Rs 20.43 billion) DSK scam about?
These people (the DSK group) were never businessmen. They just collected loans from one bank and transferred it to another bank.
They collected money in the form of fixed deposits from retired people.
They had no permission from the RBI (Reserve Bank of India) to do so, but still went ahead and did it.
Since 2010, all his (D S Kulkarni's) projects have stalled.
They were just rotating money from one scheme to another scheme without returning it to investors.
Worse, they blew up the money on entertainment and travel.
When they did not return the money they took from Chander Bhatia, who was based in Dubai, he complained to SEBI (the market regulator, the Securities and Exchange Board of India) in 2015, but SEBI did not take any action.
How did bank officials get involved in the scam?
Let me give you an example. He gave false land documents to banks to procure loans.
He took a loan for land that was situated close to defence property.
Now there cannot be any construction within 500 metres of defence property. Still, the banks gave a loan to DSK knowing very well that there cannot be any construction in that area.
Bank of Maharashtra took that land as collateral. The value of that land was 0, still the loan was given.
It is the bank's duty to check all these details.
He had taken a loan of Rs 600 crore (Rs 6 billion) for the Dream City project in which Rs 100 crore (Rs 1 billion) was from Bank of Maharashtra.
He was not paying any interest on his existing loans from Bank of Maharashtra, still he got another loan from the bank in 2016-2017!
When did you find out that a scam was taking place?
I am an RTI (Right to Information) activist.
Last July some DSK depositors informed me that they had invested money in the form of FDs, but were not getting any interest on their deposits.
They told me the reason was the Dream City project. I unearthed documents of the project and discovered that a big scam was taking place.
How come no one noticed this?
It is the duty of banks and their auditors to find out.
The chargesheet says the scam is worth Rs 2,043 crore, but I feel the figure could be much higher -- as high as Rs 3,500 crore (Rs 35 billion) -- as there are a lot of depositors.
What do the depositors say?
The depositors are crying; most of them are senior citizens.
Yesterday (June 20, 2018) I met an investor who put in Rs 4 crore (Rs 40 million). That man doesn't have more than Rs 2,000 now to spend on medicines.
How do people get trapped in such scams?
Investors make mistakes.
D S Kulkarni Developers Ltd is a listed company and they (the depositors) felt they are putting money in it, but DSK floated another company secretly without informing the RBI.
They used the DSKDL logo and named it DSK & Sons, DSK Associates etc.
Common people don't understand this difference.
What were the returns DSK promised?
They promised around 12 to 14 per cent returns, which is much more than what you get on fixed deposits.
How many people have lost money, according to you?
Around 10,000 people have lost money.
What advice will you give people so they don't get trapped in such schemes?
People have to be alert.
When you go to buy vegetables you are careful, so how can you invest your money in such a way?
More importantly, never park all your funds only in one place.
What was the Dream City project about?
It was supposed to be a township. They sold the project, saying an (artificial) river would flow through the project.
Actually, DSK wanted the land for an SEZ (Special Economic Zone), but did not get permission for it. So, they converted it into 'Dream City' in which only one building has been constructed.
In which year did the scam begin?
The company itself is a scam.
First, DSK duped individual investors like Bhatia, then he started duping other people.
Were you ever threatened?
I received a call once, but I did not get scared.
Once you get into this, you cannot get scared.
Were you never scared?
Who should get scared? The one who steals, or me?
Will the investors get back their money?
Politicians only understand numbers.
If there are 9,000 investors, then it means 36,000 voters. I consider four people in an investor's family.
Investors must always show unity in such cases.
Is there a message you would like to give the younger generation about investing?
Do not believe in home delivery, just don't believe in it.
Take lessons from elderly people.
Today investment advisors come home and take a cheque from you. You don't even go to their offices, especially regarding property-related cases. Don't do it.
Don't see plots (property) on computers. Go, visit the site.
Another thing: Without giving bribe just solve one problem in your life and you will see 125 crore problems will be solved automatically.