Divine intervention fails to get back investors' money

Golden Glades which was taken over by Maharishi Group is yet to repay investors

Indian Express/June 18, 2003
By George Mathew and Santanu Ghosh

Mumbai/New Delhi -- Heard of Maharishi Vedic Construction Company or Golden Glades? Not unless you are one of those unfortunate investors who put money into this company named after Maharishi Mahesh Yogi - popularly known as The Flying Swami.

It is another of those plantation companies which mopped up money from the market with clueless investors falling for their tall claims on high interest returns ranging anywhere between 18 to 24 per cent, and left their investors high and dry.

Hear this real story: Vishal N. Kulkarni, a Mumbai-based retail investor, is a worried man. His investment of around Rs 25,000 has remained stuck in Golden Glades for the last several years. Kulkarni is one among the 800 investors who had invested in Golden Glades and yet to get back their dues.

This is despite assurances from the Maharishi Group, the current owners of the plantation company that money would be given back to the investors. "When Maharishi Mahesh Yogi's followers took over the company, I thought the company will return my money. But it has not happened,'' Kulkarni said.

According to a director in the Maharishi Group, Golden Glades was taken over by Maharishi Vedic Construction Corporation (P) Ltd in 1999-2000 when it paid around Rs 7 crore for picking up 80 per cent equity in the company.

After the death of the former managing director of Golden Glades, Ratnakar Mahashabde (who was the promoter of the project) in November 2000, the rest of the two directors in the company also sold off their stake to Vedic Construction. Ratnakar was one of the followers of the Flying Swami.

The association of Maharishi Construction, before the takeover of Golden Glades, was that Golden Glades had land in Govitri Village near Kamshet in Pune district on which Vedic construction was constructing a vedic school in accordance with the shastra of Vatsu. Vedic had purchased a portion of land from Golden Glades in 1999 by paying around Rs 18 crore.

According to Anand Shrivastava, director of Maharishi Vedic Construction, "after the death of Ratnakar, Vedic Construction realised that the liabilities were much more than what was stated while selling the company, but were anyway bound to take over the outstanding liabilities from the investors to the tune of Rs 6.33 crore.''

"We have already spent Rs 25 crore in the school,'' Shrivastava added.

Golden Glades had mopped up the money from the investors mainly through bonds at very high rate of interest ranging from 24 per cent to 18 per cent. This money was mobilised for development of land in Govitri Village and building of cottages etc.

According to Kulkarni and other investors, the project was jinxed right from the beginning. "If I had known that the project would be a disaster, I wouldn't have invested in this company,'' Kulkarni said.

Subsequently, some investors moved the criminal court in Mumbai in 2002. Then in keeping with the court's directives, the company paid Rs 3.04 crore before the court in instalments by opening an account in SBI, Churchgate branch.

According to Shrivastava, payments to the investors would be made by the court in accordance with the formula which the court would work out. The money was deposited in the account in instalments through drafts drawn on Oriental Bank of Commerce, Mumbai Service Branch. In the meantime, the court has attached the properties of Golden Glades which consist of land and the school.

Officials in Maharishi Group said that the company itself told the court that they should attach the property keeping in mind the investors' interest. Now the company proposes to pay the rest of the outstanding amount i.e. Rs 3.29 crore by August 31, 2003.

"We will try and pay up even before the deadline,'' Shrivastava said. However, they were supposed to pay the amount six months earlier, but has sought an extension from the court which was granted to them. According to a Sebi official, they had asked all plantation companies, which had failed to follow the Sebi norms to return the investors' money. "Sebi has initiated action against several plantation companies which have failed to do so,'' he said.