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| Edited By: |Source: DNA |Updated: Mar 30, 2018, 04:05 AM IST
DB Realty, the real estate company that rose from obscurity, continues to find itself in some storm or the other — and very often.
The latest is that the Central Bureau of Investigation is probing the company for investing Rs214 crore in Kalaignar TV, the channel owned by Tamil Nadu political strongman M Karunanidhi’s family.
DB Realty was at pains to clarify on Friday it did not directly invest - and that a subsidiary that it 99% owns, called Dynamix Realty, did.
Vinod Goenka, chairman, DB Realty, declined to take any questions stating he was sitting with lawyers but said the issue has been clarified to the media.
Not surprisingly, the company’s shares were hammered, touching a lifetime low of Rs137.11, before closing at Rs139.84.
That’s a loss of 10.04% or Rs15.40 a share in a single day.
Dynamix Realty, a partnership firm 99% owned by DB Realty, through a three-stage transaction gave about Rs214 crore and ended up owning 30% in Kalaignar TV.
N Sridhar, CEO of DB Realty, said the money was later returned and the company earned 8% interest on it.
It would be interesting to see what proof of cash flows the company shows to investors on how and when the money was returned.
As a corollary, as media reports of a devious association gathered steam, Mr Market also punished SpiceJet and Sun TV, owned by Kalanithi Maran, the grand nephew of DMK supremo M Karunanidhi.
Sun TV lost Rs36.30 or 7.26% to `463.75, while SpiceJet fell 12.81% or Rs7.15 to Rs48.65.
Andimuthu Raja, the tainted former telecom minister and a Karunanidhi confidante, was in power when DB group’s telecom firm, DB Etilsalat, got a licence.
Some coincidence, that.
When Sridhar was asked about this, he replied: “A lot of companies do give out loans even in Bangalore, Kolkata and Mumbai. It was one of those transactions and it happened a year before I joined, but as I understand from people in the company it is a third-party transaction.”
“It was just a short-term loan like inter-corporate deposit and in fact we have got back the money with interest and that is it.”
He said DB Realty in its own capacity has not given out any loan to the company.
“But Dynamix Realty has a big 8 million square feet project in Mahul. This project generated cash. The Rs200 crore was given as loan at 8% which is generally charged for short-term loans and the money has been repaid,” Sridhar insisted.
When was the amount repaid?
“In this financial year and as of March. The annual report will show it,” Sridhar said.
For a Rs1,000 crore annual sales company, that’s like giving a quarter’s sales on loan. Such a big change in cash flow — loan going out and flowing back — should be visible in its account books loud and clear, hope analysts.
