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Journalism of Courage
This is not a Page Three story. Though one can be forgiven for assuming so seeing Parvez Damania’s name in the newspapers. Fact is that the man, who is a must-have on the invitation lists of Mumbai’s chatterati circles, has been bad news for the Indian investor.
‘‘Do you think a man like Damania will listen to me? What is the use?’’ These are the words of a man who invested Rs 67,000 in Damania Airways and is still sitting on worthless share papers, when asked whether he has ever tried to get his money back.
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No sign of the money yet
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| The money he routinely loses in the stock market hasn’t affected his sense of humour. Manoj Mody exchanges old furniture for new in Mulund in Mumbai. He has two daughters below the age of 10 who he sends to Bombay Scottish, one of the snootiest schools in town. Wife Himali is blissfully unaware of the stock market. He bought 200 Damania Airways (Rs 72/share) shares in 1994 when the ‘circle’ was raving about private airlines. ‘‘The expectation was that it would zoom up to at least Rs 100-120.’’ It reached Rs 125. In 1996, it was Rs 16. ‘‘Then the company made a buyback offer of Rs 32 per share, and I expected it to zoom back up. I bought 3,000 shares. It barely reach Rs 20.’’ The registrar of the offer sent him a letter saying: ‘‘We have already made payments to over 11,000 share holders… We are in the process of sending you also the money… around March 1997.’’ No sign of the money yet. |
The Damania past is glorious: From running the classiest airline in the country to launching half a dozen capital issues in the Nineties.
Their interests were, well, diverse: Damania launched an airline based on running a hatchery — a precursor of Venky’s chicken. Then there was poultry medicine, a high-speed Mumbai-Goa ferry service and capital markets.
The present is grim: NEPC has run the airline to the ground and most of the Damania group companies like Agritech Hatcheries and Damania Shipping have folded up. Damania Capital Market and Damania Pharma are now considered ‘unknown’ companies by the BSE.
Parvez Damania, these days, is the spin doctor for Sahara group’s ambitious Amby Valley project in the outskirts of Mumbai.
| • Money the group raised from investors: Rs 101.85cr • Money they raised from financial institutions: Rs 31.97 crore. (source: AIBEA defaulters list) • Where are the promoters today: Parvez Damania lives in Dadar-Parsi Colony in Mumbai and Vispi Damania is based in Ahmednagar • Damania sold his shares to NEPC in September 1995 |
Sitting in his plush house in Dadar-Parsi colony, the impeccable Parvez Damania profusely perspires talking about the past. ‘‘The airline created that feeling among passengers that it was their comfort level that was important. We had the most modern aircraft… It was a highly traded stock. I sold it to the Khemkas.’’
In February 1994, the shares were at Rs 120. In April 1996, it was Rs 12.50. Twenty thousand shareholders sent in their shares for open offer launched by NEPC.
Staring at his cartoon socks, he is still unwilling to talk about the reasons for the death of his airline. There was mismanagement, there was inexperience. The decision to lease fuel-inefficient Boeing 737-200s instead of Boeing 737-300s bled his bottomline and the aircraft lease was five per cent higher than prevailing market rates.
A large chunk of Damania Airways’ Rs 64-crore rights issue in July 1994 was used for day-to-day running of the airline. The rights offer, with a Rs 30-per-share premium, was made to finance the lease of seven Boeings and three Turboprops, set up the infrastructure for fleet expansion costing Rs 33.5 crore and build an aerospace division for aircraft maintenance for Rs 33.35 crore. The government approved the import of just one aircraft and the remaining plans ran into rough weather. In the nineties, other private airlines fell like dominoes hit by government controls and wily fuel prices.
Industry watchers thumped Damania on the back for having the good sense to sell his stake to Ravi Prakash Khemka. From then on, the airline nosedived.
Sebi dogged Khemka’s heels after finding flaws in the deal and he had to pay Rs 16 extra per share.
Former operations manager Captain Vaishnav, who saw the airline through for another couple of years, is scathing about the Khemkas: ‘‘They would just cancel the flights. They had the mentality of shopkeepers, they just insisted on running the show with four aircraft. When they tried to compromise on safety of the aircraft, I bailed out.’’
A former stewardess of NEPC, Prakriti Bakshi, recalls how the staff was conned: ‘‘They kept back Rs 10,000 from our salaries. Some pilots lost close to Rs 1 lakh.’’
The airline was done in by May 1999.
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