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
Bhupanna, first look your face in the mirror ... do not waste your time eating Arab salary, ..Come back and serve Go matha and Bharat mata ... Increase the export of cow meat.. hypocrites ...
ShitKazi, like all Muslim minds you too have a crooked one.
Bhupanna. Pahle apne Bharat mata per ehsaan kar, bad me doosro ka soch .... so you are running the saudi govt. bloody shit .... If you are really running the saudi govt, I would like to learn many things from you, can u do that ??, then pls give the contact, so that i can benefit from you ....
ShitKazi, I am doing a job which needs brains and a bit of skills which you Muslims don't have. I help save a lot of lives and you should be greatful to me that I chose to come here.
Tum pe Eshan kar raha hoon.
Bopanna. you are supposed to be in India drinking GO MUTRA.... what are u doing in saudi --- drinking arab mutra / sh*t .....shame less hypocrite ...
Skazi, Saudi tere Ammi ka hai Kya ?
If there was fast track court for these cases , they may have released earlier...
Bhupanna, India is not your fathers property ......
Bopanna,
You cannot get baby like Muslims family getting, because of you are jealous mode, if you can also you will get only one after that you become tired she will go with others, it's normal routine in rss and right wings family also your leaders are not getting married and they are using also, its fact, dont insult Muslims like 45 children,Muslims can do any thing not like you ok mind it.
@boppana thnx for bad suggestions but i want to ask y should we go to pakistan. we born in india and die in india let me ask you y r u in saudi? its a islmic country y dont u work in india . the police man who had been killed in jail may be he is a sincer
Analyst Mole, if \The judicial system of Pakistan is far better than India\", please feel free to go over and settle there. Please take your four wives and their 45 children and also the family. I'll buy you freee one way tickets"
CMji please take Abdul Nasser madani too to Bhopal jail and help him reach his 72 virgins quickly ,, allah is waiting for him
You were feeding them because they were not criminals....this is your vote bank politics....UP election....how come you kill them just because they eat biriyani...these innocents were not criminals, they were under trial, you cannot prove them that they were involved in any sort of criminals...just because they are Muslims you killed them....
Mallya ran away with 10000 crores...you did not speak...but this people had 20 Rupees biriyani...you killed. them.... what kind of justice is this...
yes we need fast track courts and not FAKE ENCOUNTERS....
IF you want to save tax payers money, get rid off vajpayee and jaswant singh who are rotting on death beds and wasting tax payers money ....
Prisoners in Indian jail serve Biriyani and Shivraj Singh Chowhan eat shit...very kind hearted man he doesn't know what a situation in the jail
Yes we have to hang purohith, sadwi like all hindu terrorists in fast track court.
Yesterday Pakistan Supreme court orders probe against PM Nawaz Sharif on corruption charges in-spite of that he is running the country.The judicial system of Pakistan is far better than India where the judiciary is corrupt working under communal political leaders.
Dear CMji
FYI, deadliest Brahmin sanghi terrorists like sadhvi, aseemanand, purohit, kodnani and many others too are served chicken biryani (non veg) in jails on tax payers money for years now. Please recommend your centre govt. to feed them pure veg meal Daal Chawal only.
\Jailed terror accused eat biryani for yrs.\" So you killed them Mr Chouhan? Money-saving plan!"
We need Fast track on Vyapam too. many have been forgotten Vyapam scam
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