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Counted as it is among the world’s fastest growing economies, an unfathomable amount of money flows in and out of the Indian economic system. But there are cracks in said system, and ever so often, a fraudulent mastermind uses them to slip some cash out for their advantage. From <keyword id="19964851" type="General" weightage="20" keywordseo="ponzi" source="keywords">Ponzi</keyword> schemes to bank frauds, the Indian government and investors have fallen victim to many financial scandals — some of which were so sordid that they can be recounted like they happened yesterday. Here’s a rundown of the most infamous scams in Indian financial history: <h2><keyword id="20713434" type="General" weightage="20" keywordseo="harshad-mehta" source="keywords">Harshad Mehta</keyword> Scam (1992) – ₹4,000 Crore </h2>Perhaps the most iconic of all Indian financial scams, Harshad Mehta was known as the "Big Bull" of the stock market. He manipulated stock prices using illegal loopholes in the banking system. By obtaining unsecured loans from banks and investing them in the stock market, Mehta artificially inflated stock prices. His bubble burst when banks demanded their money back, revealing the massive fraud. This scandal led to a major reform in India's financial markets. Mehta died in jail before full legal accountability was reached, but the scam caused a significant loss to investors and led to tighter regulation in the Indian stock market. <h2><keyword id="23122396" type="General" weightage="20" keywordseo="satyam-scam" source="keywords">Satyam Scam</keyword> (2009) – ₹14,000 Crore </h2>Dubbed as India’s Enron, the Satyam scandal involved its founder, <keyword id="23122397" type="General" weightage="20" keywordseo="ramalinga-raju" source="keywords">Ramalinga Raju</keyword>, admitting to falsifying the company's accounts to the tune of ₹14,000 crore. Satyam Computer Services, once considered a blue-chip company, was found guilty of inflating profits and revenues. Raju admitted to the scam after a failed attempt to buy two Maytas firms owned by his family. This case brought corporate governance issues in India to the forefront. Raju was convicted, but the legal processes have allowed him temporary freedom through bail. But this incident called for improved transparency and stricter corporate governance norms. <h2>Punjab National Bank Scam (2018) – ₹13,700 Crore </h2>Diamond merchant Nirav Modi and his uncle Mehul Choksi orchestrated one of the largest frauds in Indian banking history by obtaining fraudulent Letters of Undertaking (LoUs) from Punjab National Bank (PNB). These LoUs allowed them to obtain loans from foreign branches of Indian banks without providing any collateral. The scam involved over ₹13,700 crore, and Modi fled the country, causing significant reputational damage to India’s banking sector. Nirav Modi’s extradition is still pending, and Mehul Choksi remains out of India’s legal jurisdiction. The scam, however, resulted in strengthened banking regulations regarding LoUs and SWIFT transactions. <h2><keyword id="23122399" type="General" weightage="20" keywordseo="vijay-mallya-scam" source="keywords">Vijay Mallya Scam</keyword> (2016) – ₹9,000 Crore</h2>The "King of Good Times" was living large while his airline, Kingfisher, was drowning in debt. Vijay Mallya allegedly defaulted on loans amounting to ₹9,000 crore from various banks. He fled to the UK in 2016, leaving creditors, employees, and stakeholders in financial distress. His lavish lifestyle amidst the collapse of his airline made this scandal a high-profile case. Mallya’s extradition process is ongoing, but he remains out of reach of Indian authorities. The main impact was enhanced scrutiny of loan defaults and triggered legal reforms on extradition. <h2>Saradha Chit Fund Scam (2013) – ₹2,500 Crore </h2>The Saradha Group, operating a ponzi scheme disguised as a chit fund, promised unrealistically high returns to its investors, mostly in West Bengal and Odisha. The scam collapsed, leaving over 1.7 million people, many of whom were low-income investors, without their life savings. Politicians and celebrities were also implicated in the case. While Sudipta Sen is behind bars, not all the accomplices have been held accountable. But this Ponzi scheme resulted in reform of chit funds and greater regulatory oversight on such investment schemes. <div type="Article" hostid="261" msid="112337071" title="Noida woman invests in stock market via an app, loses over Rs 69 lakh as it turns out to be a scam" mstype="2" mssubtype="0"></div> <h2><keyword id="6560832" type="General" weightage="20" keywordseo="2g-spectrum-scam" source="Orion">2G Spectrum Scam</keyword> (2008) – ₹1,76,000 Crore </h2>The 2G spectrum allocation scandal involved the underpricing of telecom licences to select companies in exchange for bribes. Telecom minister A. Raja was at the centre of this controversy, which allegedly caused a loss of ₹1.76 lakh crore to the exchequer. The case was seen as a massive blow to public trust in India’s telecom sector and led to significant political fallout. Sadly, all key figures involved were acquitted despite the Supreme Court’s intervention and cancellation of 122 telecom licences. <h2><keyword id="455134" type="General" weightage="20" keywordseo="coal-allocation-scam" source="Orion">Coal Allocation Scam</keyword> (Coalgate) (2012) – ₹1,86,000 Crore </h2>The coal allocation scam, or "Coalgate," involved the illegal allocation of coal blocks to private companies between 2004 and 2009. The CAG of India estimated a loss of ₹1.86 lakh crore to the exchequer due to non-competitive bidding. Many high-profile politicians and industrialists were implicated, making this one of the largest political scandals in India. While some officials faced legal consequences, many key players were not prosecuted. But it did trigger policy reforms in the allocation of natural resources. <h2>DHFL Scam (2019) – ₹34,615 Crore </h2>Dewan Housing Finance Corporation Limited (DHFL) was accused of syphoning off over ₹34,000 crore through a series of shell companies and fraudulent loans. Investigations revealed that the promoters used these funds for personal enrichment and illegal political donations. The case came to light after an investigation by investigative journalists and was later confirmed by a report from KPMG. The case is ongoing, and the main accused are in custody. For now, regulations governing non-banking financial companies (NBFCs) have been strengthened. <h2>Yes Bank Crisis (2020) – ₹3,788 Crore </h2>Yes Bank, under its founder <keyword id="19899935" type="General" weightage="20" keywordseo="rana-kapoor" source="keywords">Rana Kapoor</keyword>, was involved in questionable lending practices. The bank made high-risk loans to companies already in financial trouble, which eventually turned into non-performing assets (NPAs). Kapoor was arrested, and the Reserve Bank of India had to step in to stabilise the bank. The case highlighted serious lapses in corporate governance and risk management. As of now, Rana Kapoor is facing trial, and legal proceedings are active. The RBI has also introduced new measures to monitor the health of banks more rigorously. <h2>Commonwealth Games Scam (2010) – ₹70,000 Crore </h2>The 2010 Commonwealth Games held in New Delhi were overshadowed by corruption allegations involving inflated contracts and kickbacks. <keyword id="23122398" type="General" weightage="20" keywordseo="suresh-kalmadi" source="keywords">Suresh Kalmadi</keyword>, the head of the organising committee, was arrested for awarding contracts at exorbitant rates. The estimated loss to the exchequer was around ₹70,000 crore. This scam tarnished India’s image on the global stage. Kalmadi was arrested but the case has not resulted in major convictions or recoveries, except for stricter oversight on large public projects and international event planning. These scams not only caused financial damage but also eroded public trust in India’s institutions. In response, India has tightened regulatory frameworks, improved corporate governance, and adopted stricter banking standards, although challenges persist in tackling large-scale fraud. <div type="Article" hostid="261" msid="112896255" title="I was scammed out of $300K in a 3-month-long government impersonation scam" mstype="2" mssubtype="0"></div>

10 financial scams that shook India: A dive into deception

India’s liquor baron <keyword id="14678" type="PERSON" weightage="100" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> has been in a good <a href="http://www.businessinsider.in/Govt-Rejects-Vijay-Mallya-As-Kingfisher-Airlines-Director/articleshow/45345410.cms">few controversies</a> in the recent past, and being <a href="http://www.businessinsider.in/PNB-not-the-only-bank-to-declare-me-a-defaulter-will-do-what-I-have-to-do-Mallya/articleshow/51054600.cms">declared as a wilful defaulter by Punjab National Bank</a> and <a href="http://www.businessinsider.in/United-Bank-Of-India-First-Bank-To-Declare-KFA-And-Vijay-Mallya-As-Wilful-Defaulter/articleshow/41419364.cms">United Bank of India</a> might just be one of them. 
 However, <keyword id="6354731" type="CITY" weightage="100" keywordseo="State-Bank-Of-India">State Bank of India</keyword>, country's largest lender, has decided to deal with him hands on. <keyword id="13222" type="CITY" weightage="100" keywordseo="SBI">SBI</keyword> has reportedly approached the Debt Recovery Tribunal (DRT) seeking the arrest of Vijay Mallya so that <a href="http://www.businessinsider.in/SBI-Sends-Letter-to-Kingfisher-Airlines-May-declare-Vijay-Mallya-As-A-Wilful-Defaulter-Soon/articleshow/41707004.cms">loans to Kingfisher Airlines</a>, which was once promoted by the liquor baron can be recovered. 
 
Not only an arrest, SBI also wants his passport to be impounded and a complete disclosure of his personal assets. The move has come after Mallya struck a $75-million deal with Diageo to exit United Spirits and relocate to the UK. 
 
The CBI has charged on lenders for not taking timely action against the defaulter, which helped the company "divert funds and destroy evidence". 
 "Despite our repeated requests, the banks did not file a complaint with the CBI. We had to register the case on our own." Regretting that only "one among the 17 lenders" had declared Kingfisher a "wilful defaulter", CBI Director <keyword id="235651" type="PERSON" weightage="100" keywordseo="Anil-Sinha">Anil Sinha</keyword> said. 
 
<a href="http://s3.india.com/wp-content/uploads/2016/02/vijay-mallya.jpg">Image source</a>

SBI wants Vijay Mallya arrested

As told earlier, India’s liquor baron <a href="http://www.businessinsider.in/A-little-too-late-Mallya-flew-out-of-India-before-banks-could-take-a-stay-order-against-him/articleshow/51323634.cms">Vijay Mallya</a> who owes thousands of crores to several <keyword id="488657" type="UNKNOWN" weightage="100" keywordseo="state-run-banks">state-run banks</keyword>, has fled the country. The legal battle in the Supreme Court and Debt Recovery Tribunal against Mallya is being led by SBI. 
 
 
Here is the breakdown of Mallya’s journey from a businessman to a wilful defaulter. 
 
1) Mallya owes nearly Rs 7,000 crore to bankers. Here's how it stacks up 
 
Rs 1,600 crore - SBI 
 
Rs 800 crore - PNB 
 
Rs 800 crore - IDBI 
 
Rs 650 crore - Bank of India 
 
Rs 550 crore - Bank of Baroda 
 
Rs 430 crore - United Bank of India 
 
Rs 410 crore - Central Bank of India 
 
Rs 320 crore - UCO Bank 
 
Rs 310 crore - Corporation Bank 
 
Rs 150 crore - State Bank of Mysore 
 
Rs 140 crore - Indian Overseas Bank 
 
Rs 90 crore - Federal Bank 
 
Rs 60 crore - Punjab &amp; Sind Bank 
 
Rs 50 crore - Axis Bank 
 
He, however, claims that out of these 7000 crores, Rs 1,200 crore have been recovered by these banks. 
 
2. A look at his holdings in his companies 
 
33% in United Breweries, which is worth Rs 7,000 crore. But more than half of the stake is pledged. 
 
22% interest in Mangalore Chemicals &amp; Fertilisers, which is worth Rs 140 crore. One-third of the shares are pledged. 52%of UB Holdings, a shell company, which has some real estate in Bangalore and other places, but the rentals have already been pledged. 
Under 1% stake in Bayer Corp Science, but Mallya remains its chairman. 
 
3. How Mallya became Mallya 
 
1983 | After his father's death, Mallya becomes UB group chairman at 28. 
1999 | Launches Kingfisher Strong, which changes beer consumption nationally, is still the largest selling brand. 
2002 | Nominated to Rajya Sabha. 
 
4. Mallya's shopping list 
 2005 | Launches <keyword id="6373962" type="CITY" weightage="100" keywordseo="Kingfisher-Airlines">Kingfisher Airlines</keyword> (KFA). Buys Shaw Wallace, gaining whisky brands such as Royal Challenge 
2006 | Buys Herbertsons, makers of Bagpiper whisky and Romanov vodka. 
2007 | Buys F1 team Spyker, renames it Force India. Acquires Air Deccan. Buys British whisky maker Whyte and Mackay for £595m. 
2008 | Buys IPL team Royal Challengers Bangalore for $111.6m. UB City comes up in Bangalore. 
 
5. And, how it got ruined 
2012 | KFA staff strike work for nonpayment of salaries, income-tax dept freezes KFA accounts, airline grounds flights. In Oct, govt suspends KFA licence. British alcoholic beverages firm Diageo agrees to buy majority stake in United Spirits 
2013 | Diageo acquires 27% stake in USL for Rs 6,500 crore, but KFA lenders do not get any funds. 
2014 | United Bank identifies United Breweries Holdings as wilful defaulter. 
2015 | Diageo asks Mallya to step down as chairman of the Indian liquor firm but he refuses. 
2016 | Banks move debt recovery tribunal, which restrains Mallya from accessing Rs 515 crore he was to receive from Diageo as settlement after agreeing to quit. 
 
6. The pain of Kingfisher’s employees 
Over 1,500 staffers, still on the firm's payrolls after it stopped operation, not paid? On March 5, employees write an open letter to Mallya, saying his 'heart is impure' and he has blood on his hands. They seek PM Narendra Modi's help to get their dues. 
 
7. Despite whatever he says, Mallya isn’t a broke bloke 
 
Mallya owns homes in Trump Towers, New York City, and in San Francisco. Game resort in South Africa. A beachfront villa in Goa. He also has a fleet of over 200 luxury vintage cars, a 95m "mega yacht" with a helipad, a Gulfstream private jet. 
 
<a href="http://clientimages.teamtalk.com/14/11/800x600/Vijay-Mallya_3228444.jpg">Image source</a>

Vijay Mallya’s journey from a businessman to a fraudster

On Tuesday, a group of 13 banks, which India’s biggest lender State Bank of India was heading, approached the Supreme Court so that an order could be passed to prevent liquor baron <keyword id="14678" type="PERSON" weightage="100" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> from flying out of the country. However, Mallya, who owes huge amounts to these banks in the form of unsettled loans, is believed to have already left India a few days ago. 
 
The amount that Mallya owes to these banks runs up to over Rs 9,000 crore, the reason why the banks wanted him to be in the country under their watchful eyes, especially after he had claimed a few days back that he wants to make London his home now. 
 
When contacted by ET, Mallya's spokesperson said that since he was communicating through mails, his present location remains unknown. 
 
<a href="https://churumuri.files.wordpress.com/2009/09/09sept29kpn99.jpg">Image source</a>

A little too late! Mallya flew out of India before banks could take a stay order against him

It’s been a few days that Punjab National Bank declared <keyword id="14678" type="PERSON" weightage="100" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> a 'wilful defaulter', but the liquor tycoon Vijay Mallya has said that "PNB is not the only bank and he will do what he has to do". 
 
The man who is known for his flamboyance and hosting lavish parties even when his companies have been declared to be defaulters by lenders, Mallya said that he won’t comment on people’s "perception" about his lifestyle. 
 
He, however, said that he does want to settle his accounts with banks. 
 After United Bank of India and SBI, PNB is the third public sector bank to declare now defunct <keyword id="79245" type="COMPANY" weightage="100" keywordseo="Kingfisher-airline">Kingfisher Airline</keyword> and its two guarantors - United Breweries (Holdings) Ltd and Mallya - as wilful defaulters. 
 
He also refused to comment on RBI Governor Raghuram Rajan's recent comment on lavish birthday parties thrown by loan defaulters. 
 
<a href="http://www.sportstarlive.com/multimedia/dynamic/02604/31_SSLIVE_MALLYA_2604266b.jpg">Image source</a>

PNB not the only bank to declare me a defaulter, will do what I have to do: Mallya

<a href="http://www.businessinsider.in/searchresult.cms?query=VIJAY+MALLYA" target="_BLANK￿￿￿￿">Vijay Mallya</a> is just the tip of the iceberg and banks are now going strong on revealing the <a href="http://www.businessinsider.in/searchresult.cms?query=defaulters" target="_BLANK￿￿￿￿">defaulters</a> and naming them publicly. 
 Another name that has appeared is of <keyword id="1671644" type="UNKNOWN" weightage="20" keywordseo="Winsome-Group">Winsome Group</keyword>, which are now a distant memory. 
 
In 2013, two Winsome Group companies, a diamond house, defaulted with 14 banks and created a debt of Rs 6, 800 crore with local lenders. 
Now, the <a href="http://www.businessinsider.in/searchresult.cms?query=cbi" target="_BLANK￿￿￿￿">CBI</a> is investigating the long forgotten matter and even lenders are resorting to name and shame some of the former and present independent directors of Winsome Diamonds &amp; Jewellery and another group company, Forever, to get their money back. 
 
Even <a href="http://www.businessinsider.in/searchresult.cms?query=punjab+national+bank" target="_BLANK￿￿￿￿">Punjab National Bank</a>, with exposure of Rs 1, 800 crore, has sprung into action and has sent out letters to three people asking them to help in arranging repayment. 
 
Failing to do so, banks will declare them as <a href="http://www.businessinsider.in/searchresult.cms?query=wilful+defaulters" target="_BLANK￿￿￿￿">'wilful defaulters'</a> and even publish their names and photographs in newspapers. 
 
They are Harimohan Namdev, a practising company secretary; Madan Khurjekar, a former banker; and Urvashi Saxena, who was a senior official with the income-tax department. Among them, Namdev is still on the board of Winsome. 
 
As per a report in Economic Times, three of them said they have replied back to the PNB, saying that as per <a href="http://www.businessinsider.in/searchresult.cms?query=RBI" target="_BLANK￿￿￿￿">Reserve Bank of India</a> rules independent directors cannot be declared '<keyword id="1467083" type="UNKNOWN" weightage="20" keywordseo="wilful-defaulters">wilful defaulters</keyword>' for a company's failure to repay loans. 
 
A wilful defaulter is a person who will barred from getting any loans from banks in the future and from taking up post on boards of listed companies. 
 
(Image: Thinkstock)

Another name appears in witch-hunting by banks; diamond house Winsome Group under Rs 6, 800 crore debt

<keyword id="113653" type="COMPANY" weightage="80" keywordseo="United-Bank-of-India">United Bank of India</keyword> has become the first bank to declare <keyword id="6373962" type="CITY" weightage="80" keywordseo="Kingfisher-Airlines">Kingfisher Airlines</keyword>, it's promoter <keyword id="14678" type="PERSON" weightage="80" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> as well as three directors on the board of <keyword id="6583397" type="COMPANY" weightage="100" keywordseo="KFA">KFA</keyword> as wilful defaulters. 
 According to a source close to the development, " the action comes after KFA officials did not show up for the meeting with United Bank's grievance redressal cell this morning at 10:30 AM." The grievance redressal committee of United <keyword id="6355303" type="CITY" weightage="80" keywordseo="Bank-of-India">bank of India</keyword> is headed by the bank's executive director D Narang. The bank is also in the process of sending formal notices to the company. Sources say the bank will also inform the Reserve Bank of India about its decision. 
 
"Yes, we have declared Vijay Mallya and three directors as wilful defaulters," UBI executive directors Deepak Narang told ET. 
 
Wilful defaulters are prohibited to borrow money from banks and cannot continue as a director in any company. 
 
"We had requested them to appear before our panel at 10.30 am on Monday. They did not come. So, we have declared them as wilful defaulters on the basis of a letter furnished by them on July 4th," Narang said. 
Sources in the know indicate that the three directors along with Vijay Mallya include, AK Ganguly, Subhash R Gupte and R Nedungadi. 
 
This follows the Calcutta High Court dismissing KFA's plea against United Bank of India last week. KFA and United Bank of India have been entangled in a legal tussle for a few months now after UBI moved to declare the grounded airline as a wilful defaulter. 
 
However, sources also indicate that KFA has approached the Supreme Court in this case, in an attempt to challenge the Calcutta High Court order. KFA has been insisting to be represented by an external lawyer in front of the GRC of United Bank of India which was refused by Calcutta High court. 
 
There are serious repercussions of a company being declared a wilful defaulter which include restricting any future access to bank finance for the company as well as all directors of the company who are associated with other companies. 
 Other lenders like <keyword id="13222" type="CITY" weightage="80" keywordseo="SBI">SBI</keyword> and PNB are also in the process of declaring KFA and management as wilful defaulters. 
 
(With inputs from ET Bureau)

You Searched For "PNB Vijay mallya" and got 7 results

10 financial scams that shook India: A dive into deception

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