A staggering 2,664 corporates have been classified as wilful defaulters, failing to repay bank loans despite having the means to do so, according to the Reserve Bank of India (RBI). As of March 2024, these defaulters owed Rs 1,96,441 crore to the banking system, raising concerns about the financial health of India’s corporate sector and the potential risks to the banking system.
Replying to the Right to Information (RTI) queries filed by The Indian Express, the RBI named the top 100 corporate defaulters (excluding individuals and foreign borrowers) with Gitanjali Gems Ltd topping the list with a wilful default of Rs 8,516 crore as of June 2024.
The number of wilful defaulters had gone up from 2,154 in March 2020 to 2,664 in March 2024 and the amount they owed rose from Rs 1,52,860 crore to Rs 1,96,441 crore in the last four years, as per the RBI data.
The actual default and other liabilities claimed before the National Company Law Tribunal (NCLT) run into several thousands of crores by these companies. As per the RBI classification, a ‘wilful default’ would be deemed to have occurred if the borrower has defaulted in meeting their repayment obligations to the lender even when they have the capacity to honour the obligations.
A wilful default happens when the borrower has not utilised the finance from the lender for the specific purpose for which finance was availed of, and has diverted the funds for other purposes, or siphoned off funds, or disposed of or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank.
Mehul Choksi, promoter of Gitanjali Gems, and his nephew Nirav Modi fled India after an FIR was filed when the loan fraud committed by the company was reported. The Serious Fraud Investigation Office (SFIO) recently dropped charges against 60 individuals and entities in the ongoing Gitanjali Gems fraud case.
During the audit it was alleged that the top management of the company was involved in diversion of funds causing criminal breach of trust with an intent to use the banks funds for personal gains possibly to tax havens.
Promoted by Rishi Agarwal and a major player in the shipbuilding sector, ABG Shipyard owed Rs 4,684 crore. During an audit by E&Y as mandated by SBI, it was allegedly found that the top management of the company was involved in diversion of funds for personal gains. Agarwal was arrested by Central Bureau of Investigation (CBI) in September 2022.
Third in the defaulters’ list, Concast Steel and Power owed Rs 4,305 crore to banks, according to the RBI. The Enforcement Directorate (ED) earlier this week arrested industrialist and owner of Concast Steel and Power Sanjay Sureka in connection with the bank-fraud case. Jewellery worth Rs 4.5 crore and several foreign-made luxury cars were seized during raids at properties linked to him.
Promoted by HS Bharana, Era Infra Engineering has a wilful default of Rs 3,637 crore and comes fourth in the RBI list. Bankruptcy court NCLT approved the company’s acquisition by SA Infrastructure Consultants Pvt Ltd in June this year.
REI Agro has a wilful default of Rs 3,350 crore. ED had arrested Sandip Jhunjhunwala, managing director of REI Agro Ltd, in connection with a money laundering investigation against him for allegedly defrauding a consortium of banks in 2018. The company was once the world’s largest basmati rice processing and marketing firm during its peak period in 2013.
Promoted by fugitive Jatin Mehta, Winsome Diamonds has wilful default of Rs 2,927 crore. Mehta fled the country soon after the fraud was detected. Forever Precious Jewellery, also from the Winsome Diamond group, defaulted another Rs 1,692 crore. A London court had issued a worldwide freezing order in 2022. The Mehtas allegedly carried out over $1 billion fraud whereby proceeds of bullion advanced to two companies were diverted using shell companies around the world.
Hyderabad-based Transstroy (India) Ltd is owned by former TDP MP Rayapati Sambasiva Rao. ED, in its probe, found out that the infrastructure company floated several companies to divert funds raised from banks.
Kanpur-based pen manufacturing company Rotomac Global has wilful default of Rs 2,894 crore. CBI had registered multiple FIRs for defrauding banks and defaulting loan payment. The company, promoted by Vikram Kothari, sought funds from banks and allegedly diverted it to other accounts instead of making payments to suppliers and buyers.
Zoom Developers has wilful default of Rs 2,217 crore. ED had arrested Vijay Choudhary, promoter of the company, in connection with its money laundering probe in a bank loan fraud case. He allegedly floated 485 companies.
UNIQUE BORROWERS CLASSIFIED AS WILFUL DEFAULTERS BY RBI
Data as on Number of Wilful Defaulters Amount Owed (Rs crore)
31-03-2020 2,154 1,52,860
31-03-2021 2,415 1,80,879
31-03-2022 2,553 2,15,710
31-03-2023 2,622 1,96,035
31-03-2024 2,664 1,96,441
Source: RBI
List of top 100 borrowers
(excluding individuals and overseas borrowers) classified as wilful defaulter as reported by scheduled commercial banks in RBI’s depository CRILC as on June 30,2024
Name of the Borrower Amount owed as of June 2024 (Rs crore)
GITANJALI GEMS LIMITED 8,516
ABG SHIPYARD LTD 4,684
CONCAST STEEL & POWER 4,305
ERA INFRA ENGINEERING 3,637
REI AGRO 3,350
WINSOME DIAMONDS AND JEWELLERY 2,927
TRANSSTROY (INDIA) 2,919
ROTOMAC GLOBAL 2,894
ZOOM DEVELOPERS 2,217
UNITY INFRAPROJECTS 1,987
DECCAN CHRONICLE HOLDINGS 1,960
FROST INTERNATIONAL 1,913
SHRI LAKSHMI COTSYN 1,887
SVOGL OIL GAS AND ENERGY 1,705
FOREVER PRECIOUS JEWELLERY AND DIAMONDS 1,692
HANUNG TOYS AND TEXTILES 1,647
SIDDHI VINAYAK LOGISTIC 1,575
NAKODA LIMITED 1,550
PRATIBHA INDUSTRIES 1,548
SURYA VINAYAK INDUSTRIES 1,479
GILI INDIA 1,447
NAKSHATRA BRANDS 1,440
GUPTA COAL INDIA 1,436
SHREE GANESH JEWELLERY HOUSE 1,401
PAREKH ALUMINEX 1,368
VADRAJ CEMENT 1,291
CORPORATE ISPAT ALLOYS 1,190
S KUMARS NATIONWIDE 1,137
AMIRA PURE FOODS 1,096
REVENT PRECISION ENGINEERING 1,052
KINGFISHER AIRLINES 1,021
SEL TEXTILES 980
MOSER BAER INDIA 977
BEST FOODS 964
EZEEGO ONE TRAVEL AND TOURS 944
HOUSING DEVELOPMENT AND INFRA 922
FIRST LEASING CO OF INDIA 912
PSL LIMITED 910
VARUN INDUSTRIES 868
IVRCL LIMITED 842
NUTRIONEX MANUFACTURERS 828
C MAHENDRA EXPORTS LIMITED 795
COX & KINGS LIMITED 794
SURYA PHARMACEUTICAL 792
JAY POLYCHEM (INDIA) 787
BELIEF REALTORS PRIVATE 750
METALYST FORGINGS 681
JVL AGRO INDUSTRIES 678
SHAKTI BHOG FOODS 677
JAS INFRASTRUCTURE AND POWER 673
VMC SYSTEMS 669
SAI INFOSYSTEM (INDIA) 669
JAIN INFRAPROJECTS 659
STERLING BIOTECH 656
RADIKAL FOODS 646
FIRESTAR INTERNATIONAL 643
G.E.T. POWER 601
SURANA INDUSTRIES 594
INDIAN TECHNOMAC COMPANY 590
ZYLOG SYSTMES 579
INDIAN TECHNOMETAL COMPANY 575
SHILPI CABLE TECHNOLOGIES 572
J.M.D. OILS PVT LTD 567
BASE CORPORATION 533
UNITECH LIMITED 533
TOTEM INFRASTRUCTURE 528
AVANTHA HOLDINGS 521
ARVIND REMEDIES 521
PUNJ LLOYD 518
PATHBREAKING PROJECTS LIMITED 504
STERLING SEZ AND INFRASTRUCTURE 495
SHREE BANKEY BEHARI EXPORTS 479
BS LIMITED 477
KWALITY LIMITED 475
LOHA ISPAAT LIMITED 474
BHARATI DEFENCE AND INFRASTRUCTURE 461
SPANCO LIMITED 461
SUNIL HITECH ENGINEERS 461
VISA POWER 458
KRISHNA KNITWEAR TECHNOLOGY 456
CENTURY COMMUNICATION 454
ACIL LIMITED 453
ARAVALI INFRAPOWER 443
CORPORATE POWER 441
ALFARA’A INFRAPROJECTS 434
KANISHK GOLD 431
PRAKASH VANIJYA PRIVATE 431
USHER AGRO 426
BHADRESH TRADING CORPORATION 426
PIXION MEDIA 425
- P. INFO SYSTEMS 412
SHREE SHYAM PULP & BOARD MILLS 411
ATHENA CHHATTISGARH POWER 408
VANDANA VIDHYUT 401
COX & KINGS FINANCIAL SERVICE 398
ROTOMAC EXPORTS 388
BIOTOR INDUSTRIES 387
KONASEEMA GAS POWER LIMITED 386
K.S. OILS LIMITED 381
Source: RBI
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