Homestay attack: Congress demands CBI probe

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.

Bengaluru, Jan 23: City civic body Bruhat Bengaluru Mahanagara Palike (BBMP) levied a penalty of Rs 50,000 on the Karnataka State Cricket Association (KSCA) for using single-use plastic cups during the recent India-Australia one-day international match at the M Chinnaswamy Stadium in Bengaluru.

"Despite many awareness meetings, BBMP has found that single-use plastic cups were used during yesterday's cricket match and has fined KSCA Rs 50,000 as penalty," tweeted the civic body commissioner BH Anil Kumar.

The state cricket association treasurer Vinaya Mruthyunjaya said the civic body gave a general notice without detailed information on plastic use.

"We have been environmentally friendly for the last many years and at all gates, security has made sure no plastic or flex was allowed inside the stadium," Mruthyunjaya told media.

Mruthyunjaya said KSCA sought information from the civic body as to where the single-use plastic cups were found in the stadium during the India-Australia match.

On January 16, KSCA president Roger Binny inaugurated a plastic bottle shredder at the Chinnaswamy Stadium, in addition to other green initiatives at the cricket ground such as solar panels, sub-air system, biogas unit, rainwater harvesting and others. 

Similarly, in December 2019, BBMP cracked down on popular fast food eatery – Adyar Anand Bhavan in HSR Layout and fined the establishment Rs 1 lakh for plastic use.

In October, the BBMP fined eateries including McDonald's in central Bengaluru for using plastic.

Bengaluru, Feb 25: A smooth-talking ‘swamiji’ has come under police radar after a widow lodged a complaint stating he cheated her of over Rs 27 crore and three kgs of gold between 2016 and 2019.

The woman, Geetha of Ramamurthynagar, was staying with her three sons after her husband, a landlord, died in 2009. Her family owned several sites in Tavarekere and other parts of the city, apart from a farm near Bethamangala in Kolar district.

Geetha, who had got into property disputes with her relatives, said she was introduced to the accused, Nagaraj C of Bangarapet, who claimed to possess powers to ward off evil spirits, by one of her farm labourers. “I was assured that all my problems would be solved. He came to my house and claimed he had been sent by god and would find solutions to all my problems,” she stated.

Nagaraj allegedly pretended to be possessed by spirits and directed her to give him gold bars. Geetha ended up giving three kgs of gold in the process. Later, he began directing her to sell a few properties stating these were the root cause of her problems. “I sold many properties and pledged a few residential sites. He took Rs 22.5 crore that came from selling properties, apart from Rs 5 crore cash from my husband’s savings,” she stated.

She said Nagaraj took the money from her on the promise of buying alternative properties. “When I demanded he return all my money, he threatened to kill me and my kids using evil spirits,” she alleged.

Police have registered a case of cheating, criminal conspiracy, criminal intimidation under various IPC sections and Karnataka Prevention and Eradication of Inhuman Evil Practices and Black Magic Bill, 2017, against Nagaraj and others.