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
They should have sold them to Muslims when they were healthy, at least cow owners could have made some money.....Huge financial loss for poor farmers.....please get ride cow politics from the society....you cannot make vote out of it....it is too late now...let the people eat beef who are interested and enjoy...if BJP are not interested just shut their mouth and keep quite...
Cows in custody of muslims are only mathas rest are........
Viren Kotian, Udupi..... How do you say \ one particular community \" You are totally wrong... Christians, Hindus and Muslims are eating beef....Up date your knowledge...."
@ viren kotian jiiii
if human mother die.. their own son or daughter they will take care about them,
but here u r saying right ur mother is cow , what ur comments here we need that
please take care of ur own mother the
Ha ha...Viren....
Mother's will die even human...but will you leave your mother to be rotten on streets.......as you do... you stop mother GO politics and do something by your own ....did you ever serve a cow or your own mother..?
Dear Viren/Naren,
Do you give your mother better care and try to give best treatment if she is hospitalized or she is sick? If yes. Why not to your mother cow. Don't give unnecessaary comments which divide the communities. Go and save these dying cows. God will give you reward for saving these mothers. Every one die that every one knows. Then why you spend money for hospitalization
If only the holy cow could write an essay on her everyday life in India & voice her concern on people killing & getting killed in her name.
Indian people are treating a human being as an animal on the grounds that he/she ate an animal (cow).
this indian people never change their emotional they even cant allow to eat or live.
this makes more beef trade. lets have some fun.
It clearly shows that nobody can change the cruelty of the animals, let leave everything to the almighty, lets allow ghost eat the feast everyday,,.
Beef ban and ban on cow slaughter is the most idiotic law. It is sure the cows will have a slow death of starvation and thirst.
these groups if they are really interested in truly breeding sacred animal , then why 30 cows perish in a day ??? its all just for politics only! even the labors of the shed not paid for months?? india today has exposed these \gau rakshas\" politics !!!"
Achedin for cow vigilantes but bad day for cows and other civilized people. The expense of the cows should be inquired by Supreme court monitored SIT!
the whole population there must be living in fear & may not be coming out of their houses as the chaddi baniyan gang from the cow vigilante brigade must be wanting to thrash the daylight out of these residents?May be sec.144 should be in place or may be security forces be sent.Another problem is the traditional professionals who skin dead cows may also be scared of the above brigade as they also will be thrashed.That leaves govt.in a dilemma what to do, really pitiable situation in this sleepy state?May be FDI should be welcome from foreign countries,who could help us clean this problem?God save us!
Not only cows, human mother also will die. No one is permanent in this world. stop this politics. Here nobody ate mother's flesh unlike the members of one particular community.
Add new comment