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
True Muslim Even in the age of 80 fights like an tiger. But RSS fellow in the age of 20s needs a group to attack on elder muslims.
RSS needs bunch of coward sena to attack an old man or woman. It shows that they are not only coward but impotent too.
They are coward because they are the followers of Rama, one who used monkey sena to save his wife from ravana.
How they can respect?they have pros.childreans they are living in bhat house.bhat is there father.chaddis are animal.
better it is not to live than to live like a coward.
80 years old one man against a bunch of cowards proves it all.
this is an Inhuman act. The culprits should be punished.
Oh shivaji babu, I just pray that your parents should not face same problem.. Then who will you blame? Family members? YOurself or any other! every dog has a day my dear babu.
seriously inhuman act, beating elders not good.
these are not anti social these are terrorists and anti national islamophobes who are terrorising the common man.
Dear Shivaji,
From where you received that the aged couples are attacked by relatives? If it is true its inhuman. However, no relatives will attack the old couples such way where they cannot bear the pain. No media reported that the attack was by relatives, you have to clarify the source of your news.
This is not new in DK, RSS thugs and police attack aged Muslims people at thier home or outside. There are ample evidence, RSS thugs dressed in Police uniforms attacked homes in Ullala and other places in Mangalore recently. A MLC from BJP admitted that 60% RSS thugs are in Police force in Mangalore.
Kalladka is Communally sensitive since a long time, Police department sincerely work in this area to bring the peace.
SToP bending & bowing to the CHEDDIS. Dear authorities they are dragging you to HELL by portraying their FALSE history to U. Recognise the EVIL & GOOD and Support the GOOD ...
God has given you power of authority to protect the masses from such EVILS. One day U will need to answer for the injustice done to the innocent... PONDER & THINK before U encourage and support CHEDDis.
Muslims Should UNITE, its getting out of control.
The DEVILS dont recognise even elderly people & women. They attack like COWARDS...
To the HONEST hindus, dont put the AXE in your leg by supporting these devils..The one who gave SOUL (LIFE) will question when he takes back our LIFE ... JOIN hands with the secular people and stop supporting the LIARs who deceive YOU by putting FAKE FEAR to unrest the SOCIETY.
Bring Anupam Kher to Learn what is intolerance and how its spreading in India.
Anupam visit Coastal Karnataka Do some Justice To your AWARD as you JUST bagged in for doing Nothing for the Country.
simply blaming particular group, this act is done by his own family for property dispute.
really terrible, which religion is this which s not respecting elder one.
must punish the culprit. i request police to nab this goons very soon because of some bloody all society must bend their knee.
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