As the Narendra Modi government proceeds with the grandiose plans for a Bullet Train between Mumbai and Ahmedabad, a RTI query has revealed that over 40 percent of seats on all the trains on this sector go vacant causing huge losses to Western Railway.
According to RTI replies received by Mumbai activist Anil Galgali, only in the past one quarter, the Western Railway's staggering losses on this sector is nearly Rs 30 crore, or around Rs. 10 crore per month.
"The Indian government is over-enthusiastic and plans to spend more than Rs 1 lakh crore on the Bullet Train project, but it has not done its homework properly," Galgali said, adding it raises serious question marks on the viability of the Bullet Train project, whenever it comes up.
The Indian Railways have also admitted that they have no plans to introduce any new trains on this sector which is already in the red.
Replying to Galgali's query on seats occupancy on all the trains between the two cities, the WR revealed that in the past three months, 40 percent all seats went vacant on the Mumbai-Ahmedabad sector and 44 percent empty on the Ahmedabad-Mumbai route.
WR's Chief Commercial Manager Manjeet Singh said that between July 1-September 30, there are 32 mail/express serving this sector with a total seating capacity of 735,630 seats on the Mumbai-Ahmedabad sector.
Of these, only 441,795 seats were booked during that period generating a revenue of Rs 30,16,24,623 against the total estimated expected income of Rs 44,29,08,220 - incurring a huge loss of Rs 14,12,83,597 in the past quarter.
Similarly, on the Ahmedabad-Mumbai route served by a total of 31 mail/express trains with a seating capacity of 706,446, only 398,002 seats were booked, resulting in a revenue of Rs 26,74,56,982 against the estimated expected income of Rs 42,53,11,471, spelling a massive loss of Rs 15,78,54,489.
The WR provided the data of all the major trains plying on the Mumbai-Ahmedabad-Mumbai route like the Durantos, Shatabdi Expresses, Lokshakti Express, Gujarat Mail, Bhavnagar Express, Saurashtra Express, Vivek-Bhuj Express and others.
Faced with the vacancies on existing trains, the WR Divisional Engineer, Ahmedabad informed that there is no fresh proposal to introduce any new trains on this sector.
In fact, Galgali said that the most popular train, 12009 Shatabdi Express with a capacity of 72,696 seats sold only 36,117 during the July-September period on the Mumbai-Ahmedabad route and in the return direction of the total 67,392 seats, only 22,982 were sold.
This train, which once always ran packed in all seasons both ways has now proved to be a loss-maker, and the executive chair car with 7,505 seats was practically deserted with just 1,469 seats booked, plummeting revenues from the estimated Rs 1,45,49,714 to a paltry Rs 26,41,083 during the last quarter.
The position in all other trains was similar and though there is a higher demand for sleeper class compared to seats, the WR has not done enough to augment its capacity.
Galgali pointed out that given this current alarming scenario, coupled with growing preference for flights and improved road travel, the Central and Gujarat governments must review the expensive option of the Bullet Train before it becomes a white elephant for the Indian taxpayers.
After several months and innumerable complaints, the Pune Police has finally registered a first information report (FIR) against Deepak Sakharam (DS) Kulkarni, and his wife Hemanti, under the Maharashtra Protection of Investors and Depositors Act (MPID). One of the investors, Jitendra Mulekar, has registered the case against DS Kulkarni and Hemanti Kulkarni for cheating him for Rs4.40 lakh.
The Police has registered the FIR (no. 347/2017) under Section 3 and 4 of the MPID Act and under Sections 406, 420 and 34 of the Indian Penal Code. As many as 170 depositors who have invested in the fixed deposit (FD) scheme of the DSK group, had even approached the Pune police couple of months ago, demanding a cheating case be registered against the group.
"Earlier, whenever, some of the investors tried to lodge a complaint against the DSK group for cheating depositors, Mr DS Kulkarni, as if by magic, used to appear at the Police station and lure the investors with promise of repaying their money shortly. He used to tell them that putting him in jail would not help depositors get their money back. It was a convincing argument. Finally, an investor called Jitendra Mulekar has taken the lead in ensuring an FIR is lodged,” says right to information (RTI) activist Vijay Kumbhar, who has lead the fight to get depositors money back.
According to Mr Kumbhar, the DSK group has cheated depositors by raising deposits in the names of dummy companies, diverting bank loans for other project for personal gains, mortgaging useless land or mortgaging the same piece of land to different lenders. “DSK has also opened bank accounts in the name of fictitious companies, siphoned money from the publicly limited company (DSK Developers Ltd), and failed to pay government dues. If properly probed, several ‘interesting’ stories will emerge from the DSK defaults,” he added.
There are around 8,000 depositors who have reportedly invested around Rs485 crore with DSK group but due to a financial crisis, the investors have failed to get their money back from the developer. For the last several months, all these investors, largely pensioners, have been queuing up at DSK’s office in Pune.
For almost three decades, DS Kulkarni Developers Ltd (DSKDL) was the byword for ethical business practices. People were fascinated by the rags-to-riches story of Deepak S Kulkarni, its promoter, and deposited large sums of their savings in his ‘fixed deposit (FD) schemes’. This story began to falter in 2016 after 30 years.
One investor, Gupte, says, "DSK has cheated so many poor investors, flat buyers, employers, contractors and everybody who has done business with him. Seems like the family has gulped all the money earned, using this fraud."
Other investors, Neeraj, says, "I am one of the aggrieved flat buyers in the adhi ghar paise nantar (first home, pay later) scheme. To be honest, I have been naive when I entered into it but had no chance of coming out since I was losing money on that transaction. Now is even worse. Having discussed a loan of Rs32 lakh, I stand to lose that amount with no sight of the project being completed. Is there a way out from this legally?"
As pointed out by Moneylife, Mr Kulkarni, the group promoter, continued to fob investors with the promise to repay their money with interest by March 2017; it did not happen. Some say he has even threatened to commit suicide if investors filed a first information report (FIR) against him. However, neither Mr Kulkarni nor DS Kulkarni Developers.
In fact, DS Kulkarni Developers (DSKD) is mandated to update stock exchanges about every price sensitive information, especially media reports which quote significant inflow of funds or investment in the company. But not such promise that were routinely published by the media were ever part of DSKD’s disclosures to the two national exchanges.
The company’s 2016 annual report shows no default to banks (its bankers include State Bank of India, Syndicate Bank, Bank of Maharashtra, Union Bank of India, IDBI Bank, ICICI Bank and Vijaya Bank) and it has availed of construction finance from a set of housing finance companies against the security of many ongoing projects. There are no defaults to debenture-holders either. This suggests that DSKDL is careful to ensure no default to secured creditors while it has begun to default afterwards. This is exactly where the new rule of SEBI—about reporting defaults to the stock exchanges—will help protect investors by providing up-to-date information on the finances of a company.
Mr Kumbhar alleges involvement of some officials from banks in providing loans to DSK Group. “Due to mistakes from bank officials, even buyers and borrowers who opt for DSK’s ‘Get Home First and then Pay” scheme are in financial mess. Now banks are harassing such borrowers and DSK’s defaults are affecting credit ratings of these borrowers as well. Actually, government should recover this money from the salaries of bank officials, who gave almost 90% loan to DSK when there was not even 10% construction completed. I feel, the government should set up a special investigation team (SIT) to probe this entire fraud, which may be more than thousands of crores,” he added.
Media reports describe DSK as a Rs1,500-crore group with a land bank of thousands of acres. Earlier in September 2017, DS Kulkarni stepped down from the post of managing director of DS Kulkarni Developers. His son Shirish has succeeded him as the new managing director and chief executive (CEO) of the company.
In the below videos shot earlier in October 2017, Mr Kulkarni can be seen promising many things to investors at the Economic Offenses Wing of Pune Police.
Pune Police are obtaining information from investors and depositors of DSK Group. Here is the format in which information can be provided…
While maintaining that it has not issued any licence or authorisation to any company to trade in virtual currencies like Bitcoin, the Reserve Bank of India (RBI) has no information about entities dealing in illegal trading, investing and exchange of virtual currencies, reveals a reply received under Right to Information (RTI) Act.
We filed an RTI application with RBI seeking information about trading, investing, exchange and online wallet services in virtual currencies that are being offered by several entities in India. Since Reserve Bank has not yet allowed dealing with virtual currencies in the country, we wanted to know if they had taken any action against those indulged in this business.
When asked about providing information on any action taken and punishment on those entities dealing in illegal trading, investing, exchange and online wallet service of virtual currency, the central bank said, "Reserve Bank of India has no information in this regards".
Responding to a question on issuance of a notification or instructions about virtual currencies, RBI said, “As such, any user, holder, investor or trader dealing with virtual currencies will be doing so at their own risk”.
There have been several reports of usage of these currencies for illicit and illegal activities in several jurisdictions, which could subject the users to unintentional breaches of anti-money laundering laws and laws combating the financing of terrorism, it added.
Earlier in February, the central bank had issued an advisory warning people about not dealing in virtual currencies. “Reserve Bank is presently examining the issues associated with the usage, holding and trading of virtual currencies under the extant legal and regulatory framework of the country, including foreign exchange and payment systems laws and regulations,” it had said.
According to the advisory from the RBI, there been several reports of usage of these currencies for illicit and illegal activities in several jurisdictions, which could subject the users to unintentional breaches of anti-money laundering laws and laws combating the financing of terrorism.
There is a surge in e-wallets for storing virtual currency, like Zebpay, which is operated by Zeb IT Service Pvt Ltd. A large number of people are using the services of such e-wallets to trade, invest and exchange in virtual currency. These currencies are traded through exchanges peer to peer which are situated in different jurisdiction and hence their legal status is not yet clear. Moreover the whole idea of virtual currency is that it is digital and therefore also prone to cyber-attacks. This increases the risk of those using such currencies as a medium of exchange or just trading or investing in it.
Virtual currencies being in digital form are stored in electronic media that are called e-wallets. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials and malware attack.
Since they are not created by or traded through any authorised central registry or agency, the loss of the e-wallet could result in permanent loss of the currency held in those.
Payments by these currencies take place on a peer-to-peer basis without an authorised central agency which regulates such payments. As such, there is no established framework for recourse to customer disputes.
There is also no backing of any asset for virtual currencies.
"As such, their value seems to be a matter of speculation. Huge volatility in their value has been noticed in the recent past. Thus, the users are exposed to potential losses on account of such volatility in value," the RBI had said.
Bitcoins are being traded on exchange platforms set up in various jurisdictions whose legal status is unclear. Hence, its traders are exposed to legal as well as financial risks.
The central bank said that it had been looking at the developments relating to certain electronic records of virtual currencies such as bitcoins, litecoins, bbqcoins and dogecoins, their usage and trading in the country.