The Men Who Owe the Banks the Big Bucks
- By Express News ServicePublished: 04th January 2015 06:00 AMLast Updated: 04th January 2015 12:50 AM
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Finance Minister Arun Jaitley’s terming of the bad assets in the banking system as “unacceptable” and the promise of more autonomy for public sector banks to “run business with a commercial mindset” couldn’t be more timely. In March 2013, 400 companies owed a total of Rs 70,300 crore to the public sector banks, as per the All-India Bank Employees’ Association (AIBEA). In March 2014, the figure had touched Rs 85,000 crore.In early 2014, the association launched a campaign to flame and shame the defaulters in the hope of getting the money back, and put out a list of the top 50 bank loan defaulters who alone owed the banks Rs 40,528 crore. Kingfisher Airlines topped the list with an unpaid debt of Rs 2,673 crore. At 50th place was Sujana Universal Industries, with a debt of Rs 330 crore.One year later, CH Venkatachalam, secretary-general of AIBEA, says only a handful of wilful defaulters has paid up. Stressed advances—which are defined as gross non-performing assets plus restructured standard advances—of the public sector banks rose from 12 per cent of their total advances in March 2014 to 12.9 per cent by September 2014.Today, Kingfisher’s Mallya continues to top the charts, with accumulated debts of over Rs 6,920 crore, mainly borrowed from state-owned banks.Here, we profile eight of the country’s top defaulters, with details of how much they owe the banks and the status of their defaults. The Sunday Standard has collated the following information from the AIBEA list where the defaulters continue to remain more or less the same. Information was also gathered from the various companies’ latest uploaded annual report on the Bombay Stock Exchange. Other particulars of quarterly/yearly performance have been taken from the information filed by the companies with BSE. Under the mandatory disclosure agreement, all listed companies on both the NSE and the BSE are required to submit documents related to the company. These include the annual reports, quarterly performance, shareholding pattern and clarification sought by the exchanges within stipulated time periods.Vijay MallyaChairman, United Breweries Holdings LimitedThe liquor baron from Bangalore has made it to the top of the list of biggest defaulters in India for many years now. Mallya and his failed venture Kingfisher Airlines, which met its end on December 31, 2014, has liabilities of over Rs 1,26,000 crore. Mallya was named the biggest defaulter in India as he has accumulated debts of over Rs 6,920 crore, mainly borrowed from state owned banks. Mallya and three directors of his company have also been named ‘wilful defaulters’ by the state-run United Bank of India. His company owes unsecured creditors, airport and tax authorities, oil companies and aircraft lessors, among others. Mallya has not paid salaries to his employees for over two years now.Default Amount:Rs 6,920 crore/AIBEAK Raghavendra RaoFounder-CMD, Orchid Chemicals & PharmaceuticalsRao is a first-generation entrepreneur who established Orchid as a 100 per cent, export-oriented unit specialising in medicines, in 1992. He was conferred a Padma Shri in 2011. When the company went public, it was over-subscribed 18 times. Orchid has a current capacity of over 1,000 MTs and matching dosage form capacities. With a turnover of Rs 1,900 crore, the company reported a profit of Rs 272 crore in the quarter ending September 30, 2014, after a loss of Rs 200.34 crore in the year ago period.The company has defaulted on loans to the tune of Rs 938 crore, according to AIBEA. That’s not all. As of September 30, 2013, the company also has dues of Rs 591.96 lakh (Central Excise 2004-13), Rs 65.57 lakh (Service tax 2006-07) and Rs 2,464.16 lakh (Income tax 2010-11) that have not been deposited on account of disputes.Default Amount:Rs 938 crore/AIBEAL Madhusudan RaoExecutive Chairman, Lanco InfratechThe company reported net losses of Rs 2,274 crore for 2013-14 up from a loss of Rs 1,073 crore the previous year. According to information provided by All-India Bank Employees’ Association, Lanco owes Rs 533 crore in loans to nationalised banks (not counting SBI). As of March 31, 2014, the company has given corporate guarantees of Rs 13,618.21 crore to financial Institutions.Default Amount:Rs 533 crore/AIBEADeepak PuriChairman & Managing Director, Moser BaerThe New Delhi-headquartered technology manufacturing company was established in 1983 by the incumbent chairman Deepak Suri. The company has over 8,000 employees and three manufacturing facilities. According to the company, it had dues to the tune of Rs 74,450,748 payable to banks as of March 17, 2013. According to the AIBEA list, the company has defaulted to the tune of Rs 581 crore. For the quarter ended June 31, 2014, the company’s net losses had widened to Rs 189.20 crore up from Rs 98.50 crore registered in the previous year. The total accumulated losses stood at Rs 728.74 crore.Default Amount:Rs 581 crore/AIBEANitin S KasliwalChairman, S Kumars NationwideOne of the better known and advertised textile brands in India, S Kumars Nationwide has dues of over Rs 1,692 crore with the nationalised banks. The promoter Nitin Kasliwal has been spearheading SKNL since 1990. The company has brands such as Reid & Taylor in its portfolio. According to the annual report of 2013, the dues outstanding to tax authorities which have not been paid on account of disputes amounts to Rs 544.06 lakh.Default Amount:Rs 1,692 crore/AIBEAJatin MehtaPromoter, Winsome Diamonds.Starting out with the desire to ‘corporatise the diamond industry’, Jatin R Mehta promoted Winsome Diamonds in 1985. His was the first company in precious stones and metals to come out with a public issue in 1986. But the company now has defaults of over Rs 3156.62 crore at a consortium of 11 PSU banks. According to Winsome Diamonds’ annual report 2013-14, however, the company has a total default of Rs 42,588,231,950. Winsome has defaulted to the tune of Rs 2,660 crore and its associate company Forever Precious Jewellery and Diamonds to the tune of Rs 1,254 crore. The company has closed its Goa unit due to non-supply of raw materials caused by the severe financial crisis in December 2014. The company, in a filing to the BSE, said all credit had been exhausted and banks had classified the company as a defaulter.Default Amount:Rs 2,660 crore/AIBEAMukesh BhandariChairman, Electrotherm IndiaA metal melting industry player since 1983, this company holds a 2,500,000-kW market share in the global metal melting market. The company has a total debt of Rs 2,211 crore to nationalised banks (non SBI group and non private banks). According to the company annual report 2013-14, Electrotherm has outstanding dues of Rs 368.91 crore to various tax authorities which have not been deposited on account of tax disputes.Default Amount:Rs 2,211 crore/AIBEANitin SandesaraCMD, Sterling BiotechThe pharmaceutical company has defaulted on the repayment of its dues to financial institutions. The amount outstanding and overdue for less than 60 days is Rs 216.64 crore and for more than 60 days is Rs 2,017.68 crore, according to the company annual report of 2013. According to the AIBEA list, however, the company owes Rs 1,732 crore to the nationalised banks.Default Amount:Rs 1,732 crore/AIBEA
- By Express News ServicePublished: 04th January 2015 06:00 AMLast Updated: 04th January 2015 12:50 AM
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Finance Minister Arun Jaitley’s terming of the bad assets in the banking system as “unacceptable” and the promise of more autonomy for public sector banks to “run business with a commercial mindset” couldn’t be more timely. In March 2013, 400 companies owed a total of Rs 70,300 crore to the public sector banks, as per the All-India Bank Employees’ Association (AIBEA). In March 2014, the figure had touched Rs 85,000 crore.
In early 2014, the association launched a campaign to flame and shame the defaulters in the hope of getting the money back, and put out a list of the top 50 bank loan defaulters who alone owed the banks Rs 40,528 crore. Kingfisher Airlines topped the list with an unpaid debt of Rs 2,673 crore. At 50th place was Sujana Universal Industries, with a debt of Rs 330 crore.
One year later, CH Venkatachalam, secretary-general of AIBEA, says only a handful of wilful defaulters has paid up. Stressed advances—which are defined as gross non-performing assets plus restructured standard advances—of the public sector banks rose from 12 per cent of their total advances in March 2014 to 12.9 per cent by September 2014.
Today, Kingfisher’s Mallya continues to top the charts, with accumulated debts of over Rs 6,920 crore, mainly borrowed from state-owned banks.
Here, we profile eight of the country’s top defaulters, with details of how much they owe the banks and the status of their defaults. The Sunday Standard has collated the following information from the AIBEA list where the defaulters continue to remain more or less the same. Information was also gathered from the various companies’ latest uploaded annual report on the Bombay Stock Exchange. Other particulars of quarterly/yearly performance have been taken from the information filed by the companies with BSE. Under the mandatory disclosure agreement, all listed companies on both the NSE and the BSE are required to submit documents related to the company. These include the annual reports, quarterly performance, shareholding pattern and clarification sought by the exchanges within stipulated time periods.
Vijay Mallya
Chairman, United Breweries Holdings Limited
The liquor baron from Bangalore has made it to the top of the list of biggest defaulters in India for many years now. Mallya and his failed venture Kingfisher Airlines, which met its end on December 31, 2014, has liabilities of over Rs 1,26,000 crore. Mallya was named the biggest defaulter in India as he has accumulated debts of over Rs 6,920 crore, mainly borrowed from state owned banks. Mallya and three directors of his company have also been named ‘wilful defaulters’ by the state-run United Bank of India. His company owes unsecured creditors, airport and tax authorities, oil companies and aircraft lessors, among others. Mallya has not paid salaries to his employees for over two years now.
Default Amount:
Rs 6,920 crore/AIBEA
K Raghavendra Rao
Founder-CMD, Orchid Chemicals & Pharmaceuticals
Rao is a first-generation entrepreneur who established Orchid as a 100 per cent, export-oriented unit specialising in medicines, in 1992. He was conferred a Padma Shri in 2011. When the company went public, it was over-subscribed 18 times. Orchid has a current capacity of over 1,000 MTs and matching dosage form capacities. With a turnover of Rs 1,900 crore, the company reported a profit of Rs 272 crore in the quarter ending September 30, 2014, after a loss of Rs 200.34 crore in the year ago period.
The company has defaulted on loans to the tune of Rs 938 crore, according to AIBEA. That’s not all. As of September 30, 2013, the company also has dues of Rs 591.96 lakh (Central Excise 2004-13), Rs 65.57 lakh (Service tax 2006-07) and Rs 2,464.16 lakh (Income tax 2010-11) that have not been deposited on account of disputes.
Default Amount:
Rs 938 crore/AIBEA
L Madhusudan Rao
Executive Chairman, Lanco Infratech
The company reported net losses of Rs 2,274 crore for 2013-14 up from a loss of Rs 1,073 crore the previous year. According to information provided by All-India Bank Employees’ Association, Lanco owes Rs 533 crore in loans to nationalised banks (not counting SBI). As of March 31, 2014, the company has given corporate guarantees of Rs 13,618.21 crore to financial Institutions.
Default Amount:
Rs 533 crore/AIBEA
Deepak Puri
Chairman & Managing Director, Moser Baer
The New Delhi-headquartered technology manufacturing company was established in 1983 by the incumbent chairman Deepak Suri. The company has over 8,000 employees and three manufacturing facilities. According to the company, it had dues to the tune of Rs 74,450,748 payable to banks as of March 17, 2013. According to the AIBEA list, the company has defaulted to the tune of Rs 581 crore. For the quarter ended June 31, 2014, the company’s net losses had widened to Rs 189.20 crore up from Rs 98.50 crore registered in the previous year. The total accumulated losses stood at Rs 728.74 crore.
Default Amount:
Rs 581 crore/AIBEA
Nitin S Kasliwal
Chairman, S Kumars Nationwide
One of the better known and advertised textile brands in India, S Kumars Nationwide has dues of over Rs 1,692 crore with the nationalised banks. The promoter Nitin Kasliwal has been spearheading SKNL since 1990. The company has brands such as Reid & Taylor in its portfolio. According to the annual report of 2013, the dues outstanding to tax authorities which have not been paid on account of disputes amounts to Rs 544.06 lakh.
Default Amount:
Rs 1,692 crore/AIBEA
Jatin Mehta
Promoter, Winsome Diamonds.
Starting out with the desire to ‘corporatise the diamond industry’, Jatin R Mehta promoted Winsome Diamonds in 1985. His was the first company in precious stones and metals to come out with a public issue in 1986. But the company now has defaults of over Rs 3156.62 crore at a consortium of 11 PSU banks. According to Winsome Diamonds’ annual report 2013-14, however, the company has a total default of Rs 42,588,231,950. Winsome has defaulted to the tune of Rs 2,660 crore and its associate company Forever Precious Jewellery and Diamonds to the tune of Rs 1,254 crore. The company has closed its Goa unit due to non-supply of raw materials caused by the severe financial crisis in December 2014. The company, in a filing to the BSE, said all credit had been exhausted and banks had classified the company as a defaulter.
Default Amount:
Rs 2,660 crore/AIBEA
Mukesh Bhandari
Chairman, Electrotherm India
A metal melting industry player since 1983, this company holds a 2,500,000-kW market share in the global metal melting market. The company has a total debt of Rs 2,211 crore to nationalised banks (non SBI group and non private banks). According to the company annual report 2013-14, Electrotherm has outstanding dues of Rs 368.91 crore to various tax authorities which have not been deposited on account of tax disputes.
Default Amount:
Rs 2,211 crore/AIBEA
Nitin Sandesara
CMD, Sterling Biotech
The pharmaceutical company has defaulted on the repayment of its dues to financial institutions. The amount outstanding and overdue for less than 60 days is Rs 216.64 crore and for more than 60 days is Rs 2,017.68 crore, according to the company annual report of 2013. According to the AIBEA list, however, the company owes Rs 1,732 crore to the nationalised banks.
Default Amount:
Rs 1,732 crore/AIBEA
Published: May 6, 2014 20:24 IST | Updated: May 7, 2014 14:46 IST
AIBEA releases list of bank loan defaulters
Special Correspondent
The Hindu
Kingfisher leads list of top defaultersKingfisher leads list of top defaulters
All India Bank Employees’ Association (AIBEA), on Tuesday, released the top 406 defaulters against whom banks have initiated legal actions.
These include Kingfisher Airlines (Rs.2,673 crore), Winsome Diamond & Jewellery Co. (Rs.2,660 crore) Electrotherm India (Rs.2,211crore), Zoom Developers Pvt. Ltd. (Rs.1,810 crore), Strerling Bio Tech (Rs.1,732 crore), S. Kumars Nationwide (Rs.1,692 crore), Surya Vinayak Industries (Rs.1,446 crore), Corporate Ispat Alloys (Rs.1,360 crore), Forever Precious Jewellery & Diamonds (Rs.1,254 crore), Sterling Oil Resources (Rs.1,197 crore) and Varun Industries (Rs.1,129 crore).
AIBEA wanted the regulator to publish the list of bank loan defaulters of Rs.1 crore and above, and asked it to consider wilful default of bank loan as a criminal offence.
Further, it also demanded amendment of laws to speed up recovery of bad loans and implementation of stringent measures to recover bad loans.
“As a depositor, public have the right to know the wilful defaulters,” said Vishwas Utagi, Vice President, AIBEA, here, while addressing a press conference. These 406 bad loan accounts are in 24 banks, totalling Rs.70,300 crore as on March 31, 2013.
“Why should the public be deprived of these information on defaults? … The big corporates are getting a chance to loot money… There is a nexus between top bankers and top corporate borrowers, with the support of politicians and bureaucrats,” said Mr. Utagi. He accused the Reserve Bank of India (RBI),the regulator, of not doing enough to get depositors’ money back from the wilful defaulters.
Legal remedies
He said that the non-performing assets (NPAs) of banks were the money fraudulently siphoned off from the banking system.
Mr. Utagi demanded strong legal remedies by the government and the regulators to redeem these public funds. “Banks are dealing with the hard-earned savings of the people, and today the total deposits in banks in India have crossed Rs.75-lakh crore.
“This precious money of the people needs to be safeguarded and guaranteed by proper regulations in banks…. One of the main adverse impact of the de-regulation is the increase in bad loans in banks,” said Mr. Utagi. As on April 18, 2014, bank deposits amounted to Rs.78,69,970 crore and advances Rs.60,36,080 crore.
Our Chennai correspondent writes:
Releasing the list of 406 bad loan accounts amounting to Rs 70,300 crore, the All India Bank Employees’ Association (AIBEA) on Tuesday sought amendment to recovery laws and make “wilful default” a criminal offence.
At a press conference in Chennai, AIBEA general secretary C.H. Venkatachalam said there was a four fold increase in bad loans in the past four years. From Rs 39,030 crore in March 2008, it rose to Rs 1.64 lakh crore by March 2013.
From 2001 to 2013, bad loans that were written off by banks, including private banks and foreign banks, amounted to Rs 2.04 lakh crore, he said alleging that banks were compelled to write-off loans or sanction fresh loans due to political interference.
As the Reserve Bank of India (RBI) and the Central government were not forthcoming in publishing the list of bank loan defaulters, the AIBEA has released the list in public interest, he said.
AIBEA’s campaign that was launched nation-wide on Tuesday stressed on three key points. RBI should periodically publish the list, Centre should amend recovery laws and take criminal action against wilful defaulters.
The association, with five lakh members, will soon publish state-wise list of bank loan defaulters above Rs 1 crore, he said.