For many Indian tycoons, 2019 turned woeful as lenders -- empowered by the nation’s recent bankruptcy law and desperate to clean up soured debt from their books -- started seizing assets of delinquent firms or dragged them into insolvency.
Indian banks wrote off a record $39 billion of loans in the 18 months through September in a bid to repair their balance sheets as they battled the world’s worst bad debt pile. Making matters worse, a shadow banking crisis led to a funding squeeze, crushing debt-laden businesses that were critically dependent on rollover financing.
“Life has come a full circle for tycoons that had enjoyed debt-fueled growth,” said Nirmal Gangwal, founder of distress and debt restructuring advisory firm Brescon & Allied Partners LLP. “Many firms collapsed like a house of cards. The downfall was rather unprecedented.”
The government has also been cracking down on economic crime to assuage public anger over absconding businessmen. It’s even barred some from traveling overseas if they were deemed a flight risk.
Here are some of the country’s biggest and most-storied businessmen who saw their fortunes fade. Spokespersons for none of these tycoons, except Essar, immediately replied to emails and text messages seeking comments.
Anil Ambani
The chairman of Reliance Group, which makes movies to metro lines, had a close shave with jail time in March before his elder brother and Asia’s richest man, Mukesh Ambani, bailed him out at the last minute. The woes of the ex-billionaire came to the fore when India’s top court asked him to pay Ericsson AB’s India unit about $77 million of past dues or go to jail since Anil Ambani, 60, had given a personal guarantee. His telecom carrier slipped into insolvency this year, while unprofitable Reliance Naval & Engineering Ltd. faced a cash crunch. Reliance Capital Ltd. is selling assets to pare debt. Ambani is also fending off Chinese lenders in a London court.
Malvinder & Shivinder Singh
Karma caught up with ex-billionaires and brothers Malvinder Singh, 47, and Shivinder Singh, 44, and how. Scions of a prominent business family, they once helmed India’s top drug maker and second-largest hospital chain. In October, the two were arrested on charges of fraudulently diverting nearly $337 million from a lender they controlled. India’s market regulator found in 2018 that the brothers had defrauded their hospital company of about $56 million. The collapse of the $2 billion empire turned brother against brother, prompting their mother to broker a peace deal that was short-lived. In February, Malvinder accused Shivinder and their spiritual guru of fraud.
Shashikant & Ravikant Ruia
After a hard-fought battle to keep their flagship steel mill, the first-generation entrepreneurs finally saw the bankrupt Essar Steel India Ltd. pass on to ArcelorMittal last month. The $5.9 billion takeover was almost two years in the making with multiple legal wrangles. The group, controlled by Shashikant Ruia, 76, and Ravikant Ruia, 70, were also reprimanded by a U.K. judge in March this year for concealing documents. Started in 1969 as a construction firm, Essar Group diversified, investing about $18 billion between 2008 and 2012, and piled on debt. In 2017, the group had sold another prized asset, Essar Oil.
Selling an asset to pare a liability shouldn’t be seen as a “lost asset,” an Essar spokesman said, adding that the group remains a diversified conglomerate.
VG Siddhartha
Before jumping off a bridge into a river in July in an apparent suicide, the founder of India’s biggest coffee chain Cafe Coffee Day had penned a letter that spoke of pressure from lenders, a private equity firm and harassment by tax officials. He had spent much of the last two years pledging ever more of Coffee Day Enterprises Ltd. shares to refinance loans for ever shorter periods, at ever higher interest rates. “I would like to say I gave it my all,” V.G. Siddhartha, 60, wrote in the letter. “I fought for a long time but today I gave up.”
Naresh Goyal
The former ticketing agent who built India’s largest airline by value, stepped down as chairman of Jet Airways India Ltd. in March, caving in to pressure from banks who took over the company. Cut-throat price wars and surging costs pushed Jet deeper into loss. The airline stopped flying in April and went into bankruptcy two months later as lenders failed to find a buyer. In July, an Indian court barred Naresh Goyal from flying overseas after the government said it was investigating an alleged $2.6 billion fraud involving Jet Airways.
Rana Kapoor
The founder of Yes Bank Ltd., which became India’s fourth-largest non-state lender, tweeted in September 2018 that his shares were invaluable and requested his children never to sell them upon inheritance. But trouble was brewing. The nation’s banking regulator, which found the lender had repeatedly under-reported its bad loans, refused to extend his tenure as chief executive officer. This forced Rana Kapoor, 62, to step down by end-January. Kapoor, who has pledged some of his Yes Bank shares in July, sold almost his entire stake in the lender by October.
Subhash Chandra
The rice trader-turned-media mogul, 69, who brought cable television into Indian homes in the early 1990s with his ZEE TV, resigned as chairman of Zee Entertainment Enterprises Ltd. in November and lost control of his crown jewel. Subhash Chandra has been selling stake in Zee Entertainment in the past few months to repay group’s debt.
Gautam Thapar
A default by Gautam Thapar, founder of the paper mill-to-power transmission Avantha Group, on pledged shares made Yes Bank Ltd. the biggest shareholder in CG Power and Industrial Solutions Ltd. In August, the firm was hit by an accounting scandal forcing the board to remove Thapar, 59, from the chairman’s post. A month later, the market regulator ordered a forensic audit of the firm and barred Thapar from accessing securities market.
Comments
muhammad rafique, you cant tell me what i should do . theres nothing like behaving like a muslim. i know what i have done. i am not trying to impress the management or any of the members. i did what was right. i am not against anyone . But, protesting against the college was not an option. i dont want you to fight (if you knew about islam you would also know what violence is haram) .
Thanks for helping me understand that you are a girl student .
dear sister it's better not drag my family members here.
firstly I didnt comment on you personally unless you are Naureen. i still wonder how can someone feel instigated with the phrase "justice for scarf and namaz" '
Mr. Narang kotian, we don’t want your sympathy , don’t pull down Pakistan’s politics to us keep quit.
Mr Rafeeq,
You need not to teach me where to raise my voice and where not. I also have the right to hide my identity (just like you have right to wear hijab). By the way, instead of asking me to show the guts, ask the female members of your family. Mind your tongue while arguing with a girl
why commenting with anonymous identify ? have guts to reveal yourself
why are you silent when cheddi goons have been creating ruckus in the name of moral policing?
give your suggestions to morons like pumpwell, etc
Congrats to Naureen. Muslim girls like you are asset of the nation. Don’t hesitate to go and file complaint against those who issue you threats. They are jihadists. People like them had tried to kill Malala too. I am sure that you will face more threats in future from thirbokis. But believe me, the more threats you receive, the more you become stronger.
Jai Hind
CFI has only these 3 members..! in thier protests, always these 3 people. No other people is there for them. Somehow they managed to get few girls this time for the protests.
I wont believe a muslim father will tell against issue if the intention is true. I believe CFI using that girl and politicising the issue.
Appreciate the courage of Naureen, who braved threats and issued a bold statement. All are with you. Don’t worry. Let the misogynists go to hell.
Mr Rafeeq. First you behave like a Muslim by understanding the issue. What’s the meaning of your question? Whats the meaning of asking justice for scarf & namaz? What happened in Agnes is its internal issue. You need not to send your sister or daughter to this college. Stop giving ur bullshit advices to other girls.
CFI supports only unwanted issues.
Was it too bad than your right wing folks have been spreading hatred against muslims?
Sister Naureen, what is wrong in asking justice for scarf & namaz?
First try to learn what Islam is and behave like a Muslim. Rather being a office bearer of a student council and impress upon the management and others .
Admin of the jihadist whatsapp group 'Justice for Scarf and Namaz' must be arrested immediately. This group is responsible for all the confusion. One of my Muslim friends showed me the conversations in the group. It was too bad
Some students were used by the CFI and some by the college. Please allow the students to lead the life as they wish and concentrate on education. Keep communal hatred away from the campus
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