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
May Allah grant him Jannatul Firdous. He was an ideal for many, Respected by both Muslims and Non-Muslims. Loss for Mangalore community, a peace bearer has passed away. Inna lillahi wa inna ilaihi raji'un.
Great personality. I knew Moulana Syed Yusuf Saheb since my college days in 1969 and I have attended many of his Friday Jumaa sermons (Qutbahs) at Kachi Meman Masjid in Bunder, Mangalore. He used keep a good relationships with youngsters and inspire and encourage them to carry out the noble deeds for the betterment of communities and the society.
May Allah forgive him and accept all his good deeds. May Allah bless him with the bounties of Jannatul Firdous. May Allah give sabr to the grieved family to bear the loss of their dear one.
Innaa Lillahi Wa Innaa Ilaihi Rajivoon. Heartfelt Condolences.
Inna lillahi wa inna ilihi rajiwoon . Alhamdulillah, I am fortunate enough to have met & benefited from both of you. May Almighty bless today's imams/moulana's with wisdom similar to that of Moulana Yusuf saheb.
Allah SWT please accept his service to islam, to mankind, may grant him magfirah and cause him to enter highest level of Jannah. Aameen.
May Allah reward my grandfather with Jannatul Firdaus!!
Alhumdulillah, he has done so much good in his life.
He was one of the most generous and pious people I've ever known.
May Allah give us the guidance like my grand father to follow the righteous path to practice n preach! Indeed he was is n insha Allah vl b a grt personality ! Very soft spoken very humble down to earth personality !! May Allah accept his good deeds his work n forgive his mistakes n save him from fitnah of barzaq n grant him peace in his abode n grant him the glad tidings of jannah !! Ameen !! We will miss our nana dearly
*Inna lillahi wa inna ilaihi raajioun*, may almighty allah bless late moulana syed yusuf saheb,
With jannathul firdouse, aameen. He was one of the rare islamic scholars, with rich bundle & store of knoweldge of deen and duniya, keeping a very low profile and non-controversial & a broad minded humanitarian. Indeed, in his death the muslims of mangalore / d.k.dist / udupi dist, in particular and others in general, are deprived of a high thinking and simple living scholar in this modern era. As holy quran says *kullu nafsin zaayikathul mouth*(every living soul has to taste death)., each & every one of us has to face & taste death, when our living term ends in this world. But in this joureny between life and death, we have to live with our noble living and leave this temporary world to the ever lasting eternal world, with the memory to be cherished with, by the living masses. May almighty allah give strength, patience and forebearance to the family members of late moulana syed yusuf saheb, to bear the bear the brunt of bereavement, aameen. May almighty allah guide & protect all of us, aameen.
Very true brother
Aameen.. absolutely true
Exactly.. absolutely true
Very well said.. absolutely true...
Inna lillahi wa Inna ilaihi raajioon. He certainly was a testament of not just an amazing Muslim but also an amazing human being. he was a man of complete integrity.. he was someone who did not have even an ounce of pride and was an extremely down to earth person.... I consider myself extremely fortunate to have known him so very well and to have learnt all the immense knowledge from him.. he has departed from this dunya but he will remain in our hearts perennially. May Allah grant him jannathul Firdous. Aameen
End of era. No Muslim youth who attended his sermons can go astray. We need scholars like him to educate and enlighten Muslim youth and prevent them from going astray. May allah accept all his deeds and reward him immensely.
يَا أَيَّتُهَا النَّفْسُ الْمُطْمَئِنَّةُ ارْجِعِي إِلَى رَبِّكِ رَاضِيَةً مَرْضِيَّةً فَادْخُلِي فِي عِبَادِي وَادْخُلِي جَنَّتِي
Moulana was great personality. Embodiment of simple living high thinking. Lived upto what he preached. Remained non controversial all his life. Very knowledgeable but extremely humble. His moderate and unique style of delivering khutbah impressed many,including me . He was taking keen interest in current affairs and concerned about global status of ummah. He always motivated me with his superlative appreciation and generous words. Always encourged me to deliver khutbas in his place , whenever I was in Mangalore. May Allah give him highest abode in Jannah
Innalillahi Wa Inna Ilahi Rajivoon. May Allah grant him magfirath and mashrat. I remember Moulavi Saab as a soft spoken, kind hearted,highly knowledable person but with down to earth approach. Moulavi Saab always make it a point to attend " Bearys Welfare Forum "- Abu Dhabi, arranged mass marriages at Mangalore ,and encouraged us to do more to the poor and needy in the society.
My usthad. The one who guided me and helped me to change my life. Inna lillahi va inna ilaihi rajivoon. May allah grant him one of the highest positions in jannah.
Very said. This is a loss not only for Muslim community, but also for all communities in Mangaluru. He was a true religious leader. May his soul rest in peace.
Innalillahi Wa Inna Ilaihi Rajiwoon.
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