Harsh Goenka, Chairman, RPG Enterprise has stated, “Promoters slash away on the side, take the company to cleaners, get an 80% to 90% haircut from Bankers / NCLT.  That’s the new game in town”. He has tweeted this to the Prime Minister of India.

Sowmya Datta, General Secretary, ‘All India Bank Officers Confederation has stated, “Seems like the entire body chipped into pieces and left with a few strands of hair”. He has tweeted to the Finance Minister.

It is now becoming clear that the Insolvency and Bankruptcy Code was brought to help few Corporates to loot banks through Resolution Plan (RP) and to help other Corporates to buy Industries worth thousands of crores at throw away prices. The Banks alone face the brunt, and the top executives get away.  They become Board of Directors of some of these Corporates after retirement.

The cleaners mentioned by Goenka are the retired judges sitting on the National Company Law Tribunal’s benches across the country and the Insolvency Professionals (Mostly Retired Bankers forming a resolution Agency with Chartered Accountants and Lawyers) are the modern day brokers for these deals. The Judges are given extension till they attain 67 years in most of the cases.

IBBI reports say 80% of the cases brought to NCLT are above Rs.10 Crores. Against the norms set in the act, to close cases within 180 days, average days taken are 406 days. In 360 major cases settled, the average haircut (write off) is 80%. In the initial provisions of the act, the creditors have to vote with 75% majority to agree for the settlements. This rule was amended to suit Mukhesh Ambani to buy Alok Industries worth Rs.29253 crores with a 83% haircut.

Let’s have a glance at some settlements.

Deccan Chronicle is running Videocon and 12 of its sister concerns will soon work under Anil Agarwal. Synergy Dooray is functioning. Ushdev International is also functioning, and other two will function.  The only losers are the Banks.  Has any Proprietor gone bankrupt? No. They all continue to live in style.

DHFL promoter Kapil Wadhevan has openly offered Rs.50000 Cr instead of Rs.32700 Cr offered a by Piramal Group. How? No one knows. No questions asked.

Siva Industries case is classic. It’s Promoter C. Sivasankaran was Aircel Promoter. Banks lost more than Rs.10000 Crores. He had cheated IDBI of Rs.600 crores, but again Siva Industries could get another loan. He is a citizen of Seychelles now, where he had declared himself bankrupt. NCLT Chennai bench has reserved final judgement but the lenders with majority have approved one time settlement of Rs. 323 Crores with 94% haircut. The biggest Bank of the Country SBI voted against but could not stop the deal. C. Sivasankaran’s father Vallal is going to buy the company under this settlement. He is a partner. Siva has his political connections and has got away many times earlier too.

Anil Agarwal, the sterlite owner- the company responsible for polluting Tutucorin and killing peaceful agitators, got rewarded with Videocon group of companies at throw away price. He will donate more to the ruling party.

Does anyone remember Reliance Defence, which got the Rafael deal? Without even experience of making a paper plane?

It is the same Anil Ambani who could get away with reliance Home Finance Loan of Rs.11200 crores with 60% haircut and Reliance Infratel Loan of Rs.41055 crores with 89% haircut! Wonder who is the beneficiary? His elder brother Mukhesh Ambani who has offered Just Rs.4235 crores to banks against Rs.41055 plus accrued interest.  Reliance Infratel has 43000 towers and 1.72 lakh km optic Fibre Network which will be taken over by Reliance Jio for a pittance. The loser is not Anil Ambani. It is the banks! SBI has withdrawn its petition in the Supreme Court classifying the account as fraud. Can anyone imagine that the biggest bank with RBI representative and Finance Ministry representative in its board classify an account as fraud without proper scrutiny? This can happen only in India. Because you have a powerful Prime Minister who is representing the Corporates and thinks he can fool the electorate with his Hindutva Ideology. Other things do not matter. 

We should pity the fools Mallya, Choksi and the other Modi. They could have stayed here and gone to NCLT and the ruling party.

Govt has no business to be in business, if it has friends in business who take care of everything.  People easily forgot demonetisation, GST, Pulwama Story and now the Covid mismanagement.

God Save this Country.

Thomas Franco is former General Secretary of All India Bank Officers’ Confederation.

Picture credits: Getty Images

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