Kingfisher Airlines is biggest defaulter of public sector banks
Moneylife Digital Team 05 December 2013

Vijay Mallya's Kingfisher owes Rs2,673 crore is the largest defaulter of PSBs while Winsome Diamond and Jewellery Co with dues of Rs2,660 crore is the second biggest defaulter

Vijay Mallya-owned and now defunct Kingfisher Airlines is the biggest defaulter and owes Rs2,673 crore to public sector banks (PSBs), says All India Bank Employees' Association (AIBEA).

 

According to the bank employee association, Kingfisher tops the list of 50 biggest defaulters of PSBs that owes Rs40,528 crore. In order to highlight the increasing bad loans or non-performing assets (NPAs) menace in PSBs, the bank employees are observing 5th December as 'All India Demands Day' by wearing badges and holding rallies.

 

According to the union, Mumbai-based Winsome Diamond and Jewellery Company (erstwhile Su-Raj Diamond India Ltd), with dues of Rs2,660 crore, is the second highest defaulter, followed by Electrotherm India Ltd at Rs2,211 crore.

 

In May 2013, ratings agency CRISIL downgraded the Jatin R Mehta-led Winsome Diamond to a ‘D’ rating while placing it under watch in view of continuous defaults of the company’s overseas customers and consequent development of letters of credit (LoCs). At that time, Punjab National Bank, the lead bank of the consortium, has an exposure of more than Rs1,800 crore to the Winsome Group.

 

Some of the other big-ticket defaulters include, Zoom Developers Pvt Ltd (Rs1,810 crore), Sterling Biotech Ltd (Rs1,732 crore), S Kumars Nationwide Ltd (Rs1,692 crore), Surya Vinayak Industries Ltd (Rs1,446 crore), Corporate Ispat Alloys Ltd (Rs1,360 crore), Forever Precious Jewellery and Diamonds (Rs1,254 crore), Sterling Oil Resources Ltd (Rs1,197 crore) and Varun Industries Ltd (Rs1,129 crore).                                                                                                             

                                                                                                  (Rupees in crores)                                 

 

BORROWER

LOAN NOT REPAID

  1.  

Kingfisher  Airlines

2673

  1.  

Winsome Diamond & Jewellery Co. Ltd.

2660

  1.  

Electrotherm India Limited

2211

  1.  

Zoom Developers Private Limited

1810

  1.  

Sterling Bio Tech  Limited

1732

  1.  

S. Kumars Nationwide Limited

1692

  1.  

Surya Vinayak Industries  Ltd.

1446

  1.  

Corporate Ispat Alloys Limited

1360

  1.  

Forever Precious Jewellery & Diamonds

1254

  1.  

Sterling Oil Resources  Ltd.

1197

  1.  

Varun Industries  Limited

1129

  1.  

Orchid  Chemicals  & Pharmaceutical Ltd.

938

  1.  

Kemrock Industries & Exports Ltd.

929

  1.  

Murli Industries & Exports Limited

884

  1.  

National Agricultural Co-Operative

862

  1.  

STCL Limited

860

  1.  

Surya Pharma Pvt. Ltd.

726

  1.  

Zylog Systems (India) Limited

715

  1.  

Pixion Media Pvt. Limited

712

  1.  

Deccan Chronicle Holdings Limited

700

  1.  

K.S. Oil Resources Ltd.

678

  1.  

ICSA (India) Ltd.

646

  1.  

Indian Technomac Co. Ltd.

629

  1.  

Century Communication Limited

624

  1.  

Moser Baer India Ltd. & Group Companies

581

  1.  

PSL Limited

577

  1.  

ICSA India Limited

545

  1.  

Lanco Hoskote Highway Limited

533

  1.  

Housing Development & Infra Ltd.

526

  1.  

Mbs  Jewellers  Pvt. Ltd.

524

  1.  

European Projects And Aviation Ltd.

510

  1.  

Leo Meridian Infra Projects

488

  1.  

Pearl Studios Pvt. Ltd.

483

  1.  

Educomp Infrastructure & School Man

477

  1.  

Jain Infraprojects Limited

472

  1.  

Kmp Expressway Limited

461

  1.  

Pradip Overseas Limited

437

  1.  

Rajat Pharma/ Rajat Group

434

  1.  

Bengal India Global Infrastructure Ltd.

428

  1.  

Sterling Sez & Infrastructure Pvt. Ltd.

408

  1.  

Shah Alloyes Ltd.

408

  1.  

Shiv Vani Oil And Gas Exploration Limited

406

  1.  

Andhra Pradesh Rajiv Swagruha Corp. Ltd.

385

  1.  

Progressive Constructions Ltd

351

  1.  

Delhi Airport Met Ex Ltd.

346

  1.  

Gwalior Jhansi Expressway Limited

346

  1.  

Alps Industries Limited

338

  1.  

Sterling  Port Limited

334

  1.  

Abhijeet Ferrotech Limited

333

  1.  

Sujana Universal Industries

330

 

 

40,528

List released by General Secretary, AIBEA

                                   
In view of the rising bad loans in state-owned banks, the AIBEA said the government should set up a special investigation team to probe the decisions of their credit appraisal committees in cases where borrowers have turned wilful defaulters.

 

In addition, the bank employee association also wants responsibility fixed on banks’ top brass for the loans that have turned bad, allow banks to share information on NPAs and wilful defaulters under the Right to Information (RTI) Act, and declare wilful loan default as a criminal offence.

 

Pointing out that the credit appraisal committees of public sector banks had powers to sanction single loans up to Rs400 crore in the case of large banks and up to Rs250 crore in the case of small banks, Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation, an affiliate of AIBEA, alleged that promoters of large defaulting companies diverted bank loans into real estate and floated cricket outfits for competing in domestic league matches.

 

According to the Union, over the past seven years, there are fresh bad loans worth Rs4.95 lakh crore only in PSBs, while during the same period, these lenders wrote off band debts worth Rs1.4 lakh crore. Top four defaulters of state-run banks constitute Rs23,000 crore of NPAs, the AIBEA said.

 

AIBEA has demanded remedial measures to address the growing menace of NPAs in state-run banks. The Union has demanded PSBs to publish list of bank loan defaulters of Rs1 crore and above, make wilful default in bank loan a criminal offence, order investigation to probe nexus and collusion (between the borrower and officials), amend Recovery Law to speed up the process, take stringent measures for recovering bad debts and not to incentivise corporate delinquency.

 

Last month, the Nitin J Sandesara-led Sterling Biotech, a Vadodara-based Gelatin maker, received approval from lenders to restructure its $250 million (about Rs1,575 crore) bonds. According to a report from Business Standard, Sterling Biotech’s bondholders of Zero Coupon Convertible Bonds which were due in 2012 had agreed to suspend all litigations in India and the United Kingdom, thereby opening a way for the consensual restructuring of the existing bonds.

 

Over the past year, Kingfisher, S Kumars Nationwide and Winsome Diamonds share prices have tumbled by over 60%. Following restructuring of bonds last month, Sterling Biotech shares rose 40% to Rs8.11 from Rs5.8 a year ago.

 

Kingfisher shares have fallen 63% to Rs4.92 as of 4 December 2013, from Rs13.25 as on 3 December 2012. During the same period, S Kumars and Winsome Diamonds shares fell 61% and 80% to Rs5.96 and Rs6.4, respectively.

Comments
nagesh kini
8 years ago
Thanks Mr. Utagi for coming out with the data that was always available but deliberately withheld from public scrutiny.
It now up to the Parliamentary Standing Committee to suo moto take it up and ascertain full facts from the poor risk assessment, deliberate low monitoring of the advances, lack of pro-active checks, faulty debt restructuring giving rise to back door write-off without proper approvals.
Since there are high profile big ticket players out to sabotage any enquiry only those with impeccable credentials should be associated with the Inquiry.
There has to be an immediate action in putting up all the charged assets to realize all that is possible and above all immmediately freeze any more funding by insisting that the promoters pump in additional funding right away.
As one paper rigthtly headlines it "NPA - The great bank robbery - thanks to judicial protection to the large wilfull defaulters stake holders of the lenders are in the dark about the loans."
In addition the borrowers and their guarantors ought to be named and shamed by each bank now that the High Court has cleared publishing their mug shots.
Vinay Joshi
Replied to nagesh kini comment 8 years ago
You are an activist!? Presumably!

WHY CAN'T YOU PETITION RS MP Mr. CHANDRASEKHAR ON THIS ISSUE?!?!

WHO STOPS YOU?? WHY CAN'T YOU PETITION & TALK ON 'RIL INSIDER TRADING' & 'GAS PRICING'??!!
Ashish
8 years ago
surprising most of the top defaulters don't even have a corporate website..
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