DÃ©jÃ Vu: Essar Yacht Seizure

Sucheta Dalal 02 November 2017

Economy & Nation

Sometime in 1990, a well-known Mumbai lawyer told me how his foreign clients had got a ship belonging to Essar Shipping arrested in Dubai. Having failed in their many attempts to recover their money from the Essar group, the lenders used the more efficient justice system in the UAE to embarrass Essar Shipping into repaying them. The report was published on the front page of The Economic Times where I worked then. An upset Ravi Ruia’s reaction was to wave a heavily underlined copy of the newspaper at me and question my understanding of business and journalism. He said that my very high-profile editor those days had apologised for the report. I remember saying that as far as I was concerned, Essar’s ship had, indeed, been arrested in Dubai for failure to pay. I saw no need to apologise. That was the beginning of Essar’s many payment defaults and restructuring of loans—but none of them prevented the group’s rapid expansion and massive borrowing from lenders in India and abroad.

So it was with a sense of déjà vu that one read the 5th October report of Bloomberg on how a hedge fund, David Kempner Capital Management, had ‘turned up the heat’ in its legal dispute with Essar by seizing its private jet, a Boeing 737-700, at Stansted Airport near London as part of debt recovery action that started in July 2017. It has set its eyes next on Ruia family’s luxury yacht. All this is based on a New York court order asking Essar Global Fund Ltd to pay $200 million to David Kempner Capital Management Fund (with interest) emanating from a $450-million guarantee it had extended to Essar Steel (Minnesota). Essar has been fighting Kemper’s recovery attempts in court. Meanwhile, Indian banks are also struggling to deal with the colossal bad loans of the group, but show little spunk in recovering money.

Comments

User

priyanka

9 years ago

They are having the worst track record for share holders also , ln India we need a Robinhood everywhere who will rob the super rich & benefit the poor .

nadeem

9 years ago

We (Indians) never take any action against the rich n powerful!
Whether Ruias, Mallyas or ......

Currently, what has been done about the Panama disclosures??

Ganesh Johnson

9 years ago

This Ravi Ruia & his brother Shashi Ruia are the biggest crooks in the Indian industry. In day-dreaming mode, I would love to seem the put away behind bars for a few years at least.

Vasudevan

9 years ago

We need people like you with spine

Arunkumar A Vijayan

9 years ago

Kudos to your firm stand to not apologise. We need more such people.