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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

A special court here on Thursday declared diamond businessman <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword>, the key accused in the USD 2 billion Punjab National Bank (PNB) fraud case, a fugitive economic offender, on a plea of the Enforcement Directorate. He is the second businessman after liquor tycoon <keyword id="14678" type="PERSON" weightage="20" keywordseo="Vijay-Mallya">Vijay Mallya</keyword> to be declared a fugitive economic offender under provisions of the Fugitive Economic Offenders (FEO) Act which came into existence in August last year. Special PMLA court Judge V C Barde declared Nirav Modi a fugitive economic offender after hearing extensive arguments of lawyers of the diamantaire and the Enforcement Directorate (ED). Nirav Modi had earlier urged the court here to set aside the ED's plea to declare him an FEO. Modi and his uncle Mehul Choksi are the main accused in the <keyword id="6242396" type="UNKNOWN" weightage="20" keywordseo="PNB-scam">PNB scam</keyword> and they both left India before details of the fraud came to light in January 2018. Nirav Modi was arrested in London in March this year and his extradition process is pending. In July 2018, the central agency filed an application under the newly-promulgated FEO Act to declare him a fugitive economic offender. His lawyer earlier claimed that the ED was relying on evidence and statements recorded under the Prevention of Money Laundering (PMLA) Act to seek a remedy under the FEO Act. This was not permissible under the FEO Act, he said. As per the investigating agency, Nirav Modi and his uncle Choksi, in connivance with certain bank officials, allegedly cheated the PNB to the tune of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs). These LoUs were allegedly issued in a fraudulent manner by a <keyword id="6358070" type="LOCATION" weightage="20" keywordseo="mumbai">Mumbai</keyword> branch of the PNB to the group of companies belonging to Nirav Modi since March 2011, till the case came to light. Under the FEO Act, a person can be declared a fugitive economic offender if a warrant has been issued against him for an offence involving an amount of Rs 100 crore or more and he has left the country and refuses to return.

Nirav Modi declared fugitive economic offender by a Mumbai court

In a judgement which may have implications for the case against fugitive tycoon Vijay Mallya, <keyword id="9337482" type="COMPANY" weightage="20" keywordseo="the-uk-high-court">the UK High Court</keyword> has ruled in favour of the Punjab National Bank's international subsidiary in a $22 million loan recovery case. The judgement may set a precedent in the debt recovery case in the UK against Mallya by a consortium of Indian banks. Many Indian businessman have questioned the rationale of the UK courts to try them in loan recovery cases, by citing the notices were issued in India. The case was brought against high-profile Indian businessman Pradeep Agrawal, Chairman of Superior Drinks Pvt Ltd, which manufactures Coca-Cola drinks in India, and <keyword id="9667417" type="COMPANY" weightage="20" keywordseo="superior-industries-ltd">Superior Industries Ltd</keyword> (SIL), which manufactures packaging materials, and others. The court rejected applications by two of the defendants, challenging the jurisdiction of the English court to hear PNB's claims, which concern the non-payment of a series of loans and associated guarantees relating to the purchase and operation of a cruise liner, <keyword id="9667416" type="COMPANY" weightage="20" keywordseo="the-mv-delphin">the MV Delphin</keyword>. After the borrowers defaulted on their loans, the bank began proceedings and served them notices in India. The defendants accepted that they took guarantees but challenged the jurisdiction of the English court to hear the bank's claim and also raised issues about notices served in India. After a two-day hearing, Justice Sara Cockerill rejected all of the defendants' arguments and ordered them to make an interim payment towards the bank's costs of 70,000 pounds (approx $91,000). The judgment may set a precedent for cases by Indian banks in the UK against promoters or guarantors, particularly the judge's dismissal of the argument that the guarantees were invalid because of a lack of regulatory approval by <keyword id="102024" type="COMPANY" weightage="20" keywordseo="The-Reserve-Bank-of-India">the Reserve Bank of India</keyword>. Paul Gair, partner at TLT, said: "This is a significant victory for PNBIL as it means it can now pursue its enforcement action against the defendants in the English courts. It is also a landmark decision for similar cases, as the defendants' arguments are commonly raised by Indian-based guarantors." "It follows a series of similar cases where Indian banks have successfully pursued, in the English courts, wilful defaulters who are either residing in or have assets in the UK, or where the finance agreements are subject to English law and jurisdiction. This shows that this can be a successful enforcement route when pursued properly and under the right circumstances," he added. On July 14, Agrawal and SIL filed applications in <keyword id="3657678" type="COMPANY" weightage="20" keywordseo="the-court-of-appeal">the Court of Appeal</keyword>, seeking permission to challenge Justice Cockerill's decision. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/markets/news/heres-a-look-at-the-top-ipos-lined-up-to-hit-the-market-this-year/slidelist/77241351.cms" data-type="tilCustomLink">Here’s a look at the top IPOs lined up to hit the market this year</a> <a href="https://www.businessinsider.in/business/news/reliance-retail-contribution-to-ril-as-mukesh-ambani-preps-for-fundraising-will-be-key/articleshow/77240105.cms" data-type="tilCustomLink">Reliance Retail’s contribution to RIL as Mukesh Ambani preps for fundraising will be key⁠— aside from the oil shock</a>

PNB win in UK court may set precedent for Mallya loan recovery

<ul><li>The UK Court will rule out its decision next week for Mallya’s extradition to India. </li><li>In 2019, Mallya offered to pay back all the money and salaries that he owes. </li><li>Indian authorities want Mallya back in India for $1.4 billion money laundering charges. </li></ul>New Delhi is putting all its efforts to put Mallya behind the Indian bars. A judgement on Mallya’s appeal against extradition is expected next week. The Crown Prosecution Service accused Mallya of submitting “absolute and outrageous lies” about projections of profitability and loss while applying for loans from IDBI and SBI banks in 2009 that ballooned into Rs 9,000 crore loan which he could never repay. The businessman has been declared a financial fugitive by the Indian government after he fled the country as loans mounted in 2016. He is now being tried for fraud and money laundering charges worth ₹9,000 crore($1.4bn). <div type="image" title="Indian businessman Vijay Mallya leaves the Royal Courts of Justice in London" msid="74122329" hostid="261" caption="&amp;lt;p&amp;gt;Indian businessman Vijay Mallya leaves the Royal Courts of Justice in London, Britain February 11, 2020. REUTERS/Simon Dawson&amp;lt;/p&amp;gt;"></div>

 The former founder of the defunct airline Kingfisher was on bail since his arrest on an extradition warrant in April 2017. He however had to pay up a bail bond worth 650,000 pounds with travel. He had sought permission from London? High Court to appeal against the extradition order. He has multiple cases against him, his assets in India has been sealed but bringing him to India has been taking longer. As per UK laws, to extradite a criminal, the offence he has committed should also be an offence in Britain. Fortunately, financial fraud is an offence in the country. Mallya’s counsel Clare Montgomery challenged Emma Arbuthnot of Westminster Magistrate Court’s decision on extradition order passed in December 2018, claiming it had “multiple errors” and was “plain wrong” to accept Indian government claims of fraudulent intentions. In July 2019 Mallya told the media outside in the court that he is “vindicated” by the ruling. He later offered the PNB bank that he owes money to, and the Indian authorities to pay back all the money. He tweeted in July 2019 “I once again repeat my offer to pay back the Banks that lent money to <keyword id="6373962" type="COMPANY" weightage="20" keywordseo="kingfisher-airlines">Kingfisher Airlines</keyword> in full. Please take the money. With the balance, I also want to pay employees and other creditors and move on in life.” <div type="twitter" handle="TheVijayMallya" handlename="Vijay Mallya" image="http://pbs.twimg.com/profile_images/827708603/Copy_of_VJM_4_normal.JPG" favoritecount="18947" retweetcount="3332" status="Despite the good Court result for me today, I once again repeat my offer to pay back the Banks that lent money to K… https://t.co/AZW9uJ28yt" createdat="1562086081000" id="1146098209036603398"></div>
 Mallya’s whose interests have ranged from aviation to liquor had a net worth of $750M in 2013, according to <a href="https://www.forbes.com/profile/vijay-mallya/#2a30a31f78e4">Forbes</a>. The decision of the High Court this week will mark one of the final stages of the appeals process against Mallya’s extradition to India. He can still challenge the decision in the European Courts. As in the case of match-fixing scandal Sanjeev Chawla –he challenged the decision in European Courts of Human Rights based in Strasbourg, France. However, his plea was dismissed, and his extradition to India is expected after the paperwork is done.

Vijay Mallya's homecoming judgement might come next week

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)

United Bank Of India First Bank To Declare KFA And Vijay Mallya As Wilful Defaulter

<keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword>, wanted in connection with the estimated USD 2-billion Punjab National Bank (PNB) scam case, was further remanded in custody on Tuesday by a court in London hearing India's extradition request for the diamond merchant The 49-year-old appeared on Tuesday via videolink from Wandsworth Prison in south-west London, dressed in a maroon sweater and sporting a full beard, for his regular 28-day "call-over hearing" at Westminster Magistrates' Court, where Chief Magistrate Emma Arbuthnot extended his remand for another 28 days until December 29. "It will be another short videolink call-over hearing and then there is just over a week before closing submissions in the case," she told Modi, who spoke only to confirm his name and date of birth. The final hearings in the extradition case are scheduled over two days, on January 7 and 8 next year, when District Judge Samuel Goozee is scheduled to hear closing arguments from both sides before he hands down his judgment a few weeks later. At the last hearing in the case on November 3, Judge Goozee heard the arguments for and against the admissibility of certain witness statements provided by <keyword id="443588" type="COMPANY" weightage="20" keywordseo="The-Central-Bureau-of-Investigation">the Central Bureau of Investigation</keyword> (CBI) and Enforcement Directorate (ED) and ruled that the evidence to establish a prima facie case of fraud and <keyword id="6355008" type="UNKNOWN" weightage="20" keywordseo="Money-laundering">money laundering</keyword> against the fugitive <keyword id="1105425" type="PERSON" weightage="20" keywordseo="Diamantaire">diamantaire</keyword> is broadly admissible. He concluded that he considered himself "bound" by the previous UK court rulings in the extradition case of former Kingfisher Airlines chief Vijay Mallya. <keyword id="9347723" type="COMPANY" weightage="20" keywordseo="the-crown-prosecution-service">The Crown Prosecution Service</keyword> (CPS), arguing on behalf of the Indian authorities, had stressed that the evidence, including witness statements under Section 161 of the Indian Code of Criminal Procedure (CrPC), meets the required threshold for the UK court to determine whether Modi has a case to answer before the Indian judicial system. "The argument that this is a very specific case, distinguishable from Mallya is frankly nonsense," said CPS barrister Helen Malcolm. That Mallya has a case to answer in India in his fraud and money laundering case has cleared various levels of the UK judicial system and is currently undergoing a "confidential" legal issue before UK Home Secretary Priti Patel can consider signing off on his extradition. Modi's barrister, Clare Montgomery, who was also the defence counsel in Mallya's case, however, disputed that the Section 161 witness statements qualify as similar. "The government of India case is not as strong as it was in Mallya," said Montgomery, as she also raised a specific issue over a witness who was said to speak no English in his testimony for the CBI but signed a statement in English for the ED. Modi is the subject of two sets of criminal proceedings, with the CBI case relating to a large-scale fraud upon PNB through the fraudulent obtaining of "Letters of Understanding" (LOUs or loan agreements), and the ED case relating to the laundering of the proceeds of that fraud. He also faces two additional charges of "causing the disappearance of evidence" and intimidating witnesses or "criminal intimidation to cause death" added to the CBI case. The jeweller has been in prison since he was arrested on March 19, 2019, on an extradition warrant executed by Scotland Yard and his attempts at seeking bail have been repeatedly turned down. The charges against him centre around his firms Diamonds R Us, Solar Exports and Stellar Diamonds making fraudulent use of a credit facility offered by PNB or LoUs. The CPS, on behalf of India, have told the court during the course of two separate set of hearings in May and September that a number of PNB staff conspired with Modi to ensure the LoUs were issued to his companies without ensuring they were subject to the required credit check, without recording the issuance of the LoUs and without charging the required commission upon the transactions. Modi's defence team has sought to counter allegations of fraud by deposing witnesses to establish the volatility of the gems and jewellery trade and that the LoUs were standard practice. His severe depression has also been raised as part of the arguments against extradition. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/kunal-shah-cred-raises-80-million-valuation-doubles-to-800-million-for-the-just-two-year-old-startup/articleshow/79502864.cms">Kunal Shah’s CRED raises $80 million – valuation doubles to $800 million for the just two-year old startup</a> <a href="https://www.businessinsider.in/science/space/news/new-technology-to-create-fuel-and-oxygen-on-mars-could-help-humans-explore-the-deep-sea-here-on-earth/articleshow/79504876.cms">New technology to create fuel and oxygen on Mars could help humans explore the deep sea here on Earth</a>

Nirav Modi's remand extended in UK, final hearings in 2021

Fugitive diamond merchant, <keyword id="571991" type="ORGANIZATION" weightage="20" keywordseo="Nirav-Modi">Nirav Modi</keyword>, faced another setback as a UK judge on ruled in the government of Indias favour by allowing the admissibility of its evidence against Modi. The development improves chances of Modi's extradition to India. Tuesday's hearing was an additional hearing scheduled to rule on the admissibility of evidence presented before <keyword id="10218922" type="COMPANY" weightage="20" keywordseo="the-westminster-magistrates-court">the Westminster Magistrates Court</keyword>. Modi was remanded in custody till December 1. Both sides will make their closing submissions on January 7 and 8 and the judgement is expected a few weeks after that in 2021. Modi's lawyer, Clare Montgomery QC, countered India's arguments at the hearing by comparing the case with ex Indian Navy officer but now an arms dealer, Ravi Shankaran, who is in the UK and is yet to be extradited. Arguing the overturning of Shankaran's extradition based on government of India's evidence not meeting the UK extradition criteria, Montgomery told the court that statements under section 161 of Code of Criminal Procedure in India (statements of witnesses recorded and signed by the police) were not admissible in extradition cases. Despite Montgomery's strong opposition, district judge Samuel Mark Goozee decided to rule according to the judgement in case of Vijay Mallya, which said that statements under section 161 were valid in the court of law. Referring to a report by the Law Commission of India, which claimed they "should never have any evidential value", Montgomery said, ''The concern in India is these statements are not being taken from witnesses, and are rather the product of corrupt or incompetent conduct by police." "There were many complaints that dishonest police officers can write anything they like in them and the statements are often inaccurate. Section 161 statements are not directly made by witnesses or directly confirmed by them to be true - it is simply a self-fulfilling assertion of (an) officer," Montgomery added. Helen Malcom QC, representing the Crown Prosecution Service (CPS), on behalf of the federal government of India, said the argument on Shankaran was "nonsense" and "a misguided point" and told Judge Goozee he was "bound by Mallya on (section) 161". "Section 161 is the way the CBI takes witness statements in India. This would change the entire nature of evidence from India for extraditions," Malcom added. The charges against the fugitive merchant centre around his firms Diamonds R Us, Stellar Diamonds and Solar Exports making fraudulent use of a credit facility offered by the Punjab National Bank (PNB), known as "letters of undertaking" (LoUs). The Crown Prosecution Service (CPS), arguing on behalf of the Indian authorities, sought to establish that a number of PNB staff conspired with Modi to ensure LoUs. The letters of undertaking (LoUs) were issued to his companies without required credit checks, without recording the issuance of the LoUs and without charging the required commission upon the transactions. This resulted in a fraud amounting to nearly $2 billion (Rs 13,500 crore). SEE ALSO: <a href="https://www.businessinsider.in/international/news/us-election-results-date-2020/articleshow/79034082.cms">Here’s when we will know the 2020 US election results</a> <a href="https://www.businessinsider.in/business/corporates/news/ratan-tata-mukesh-ambani-and-uday-kotak-to-be-a-part-of-pm-modis-virtual-global-investor-roundtable-on-thursday/articleshow/79032895.cms">Ratan Tata, Mukesh Ambani and Uday Kotak to be a part of PM Modi's Virtual Global Investor Roundtable on Thursday</a>

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