A staggering 2,664 corporates have been classified as wilful defaulters, failing to repay bank loans despite having the means to do so, according to the Reserve Bank of India (RBI). As of March 2024, these defaulters owed Rs 1,96,441 crore to the banking system, raising concerns about the financial health of India’s corporate sector and the potential risks to the banking system. Replying to the Right to Information (RTI) queries filed by The Indian Express, the RBI named the top 100 corporate defaulters (excluding individuals and foreign borrowers) with Gitanjali Gems Ltd topping the list with a wilful default of Rs 8,516 crore as of June 2024. The number of wilful defaulters had gone up from 2,154 in March 2020 to 2,664 in March 2024 and the amount they owed rose from Rs 1,52,860 crore to Rs 1,96,441 crore in the last four years, as per the RBI data. The actual default and other liabilities claimed before the National Company Law Tribunal (NCLT) run into several thousands of crores by these companies. As per the RBI classification, a ‘wilful default’ would be deemed to have occurred if the borrower has defaulted in meeting their repayment obligations to the lender even when they have the capacity to honour the obligations. A wilful default happens when the borrower has not utilised the finance from the lender for the specific purpose for which finance was availed of, and has diverted the funds for other purposes, or siphoned off funds, or disposed of or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank. Mehul Choksi, promoter of Gitanjali Gems, and his nephew Nirav Modi fled India after an FIR was filed when the loan fraud committed by the company was reported. The Serious Fraud Investigation Office (SFIO) recently dropped charges against 60 individuals and entities in the ongoing Gitanjali Gems fraud case. During the audit it was alleged that the top management of the company was involved in diversion of funds causing criminal breach of trust with an intent to use the banks funds for personal gains possibly to tax havens. Promoted by Rishi Agarwal and a major player in the shipbuilding sector, ABG Shipyard owed Rs 4,684 crore. During an audit by E&Y as mandated by SBI, it was allegedly found that the top management of the company was involved in diversion of funds for personal gains. Agarwal was arrested by Central Bureau of Investigation (CBI) in September 2022. Third in the defaulters’ list, Concast Steel and Power owed Rs 4,305 crore to banks, according to the RBI. The Enforcement Directorate (ED) earlier this week arrested industrialist and owner of Concast Steel and Power Sanjay Sureka in connection with the bank-fraud case. Jewellery worth Rs 4.5 crore and several foreign-made luxury cars were seized during raids at properties linked to him. Promoted by HS Bharana, Era Infra Engineering has a wilful default of Rs 3,637 crore and comes fourth in the RBI list. Bankruptcy court NCLT approved the company’s acquisition by SA Infrastructure Consultants Pvt Ltd in June this year. REI Agro has a wilful default of Rs 3,350 crore. ED had arrested Sandip Jhunjhunwala, managing director of REI Agro Ltd, in connection with a money laundering investigation against him for allegedly defrauding a consortium of banks in 2018. The company was once the world’s largest basmati rice processing and marketing firm during its peak period in 2013. Promoted by fugitive Jatin Mehta, Winsome Diamonds has wilful default of Rs 2,927 crore. Mehta fled the country soon after the fraud was detected. Forever Precious Jewellery, also from the Winsome Diamond group, defaulted another Rs 1,692 crore. A London court had issued a worldwide freezing order in 2022. The Mehtas allegedly carried out over $1 billion fraud whereby proceeds of bullion advanced to two companies were diverted using shell companies around the world. Hyderabad-based Transstroy (India) Ltd is owned by former TDP MP Rayapati Sambasiva Rao. ED, in its probe, found out that the infrastructure company floated several companies to divert funds raised from banks. Kanpur-based pen manufacturing company Rotomac Global has wilful default of Rs 2,894 crore. CBI had registered multiple FIRs for defrauding banks and defaulting loan payment. The company, promoted by Vikram Kothari, sought funds from banks and allegedly diverted it to other accounts instead of making payments to suppliers and buyers. Zoom Developers has wilful default of Rs 2,217 crore. ED had arrested Vijay Choudhary, promoter of the company, in connection with its money laundering probe in a bank loan fraud case. He allegedly floated 485 companies. UNIQUE BORROWERS CLASSIFIED AS WILFUL DEFAULTERS BY RBI Data as on Number of Wilful Defaulters Amount Owed (Rs crore) 31-03-2020 2,154 1,52,860 31-03-2021 2,415 1,80,879 31-03-2022 2,553 2,15,710 31-03-2023 2,622 1,96,035 31-03-2024 2,664 1,96,441 Source: RBI List of top 100 borrowers (excluding individuals and overseas borrowers) classified as wilful defaulter as reported by scheduled commercial banks in RBI's depository CRILC as on June 30,2024 Name of the Borrower Amount owed as of June 2024 (Rs crore) GITANJALI GEMS LIMITED 8,516 ABG SHIPYARD LTD 4,684 CONCAST STEEL & POWER 4,305 ERA INFRA ENGINEERING 3,637 REI AGRO 3,350 WINSOME DIAMONDS AND JEWELLERY 2,927 TRANSSTROY (INDIA) 2,919 ROTOMAC GLOBAL 2,894 ZOOM DEVELOPERS 2,217 UNITY INFRAPROJECTS 1,987 DECCAN CHRONICLE HOLDINGS 1,960 FROST INTERNATIONAL 1,913 SHRI LAKSHMI COTSYN 1,887 SVOGL OIL GAS AND ENERGY 1,705 FOREVER PRECIOUS JEWELLERY AND DIAMONDS 1,692 HANUNG TOYS AND TEXTILES 1,647 SIDDHI VINAYAK LOGISTIC 1,575 NAKODA LIMITED 1,550 PRATIBHA INDUSTRIES 1,548 SURYA VINAYAK INDUSTRIES 1,479 GILI INDIA 1,447 NAKSHATRA BRANDS 1,440 GUPTA COAL INDIA 1,436 SHREE GANESH JEWELLERY HOUSE 1,401 PAREKH ALUMINEX 1,368 VADRAJ CEMENT 1,291 CORPORATE ISPAT ALLOYS 1,190 S KUMARS NATIONWIDE 1,137 AMIRA PURE FOODS 1,096 REVENT PRECISION ENGINEERING 1,052 KINGFISHER AIRLINES 1,021 SEL TEXTILES 980 MOSER BAER INDIA 977 BEST FOODS 964 EZEEGO ONE TRAVEL AND TOURS 944 HOUSING DEVELOPMENT AND INFRA 922 FIRST LEASING CO OF INDIA 912 PSL LIMITED 910 VARUN INDUSTRIES 868 IVRCL LIMITED 842 NUTRIONEX MANUFACTURERS 828 C MAHENDRA EXPORTS LIMITED 795 COX & KINGS LIMITED 794 SURYA PHARMACEUTICAL 792 JAY POLYCHEM (INDIA) 787 BELIEF REALTORS PRIVATE 750 METALYST FORGINGS 681 JVL AGRO INDUSTRIES 678 SHAKTI BHOG FOODS 677 JAS INFRASTRUCTURE AND POWER 673 VMC SYSTEMS 669 SAI INFOSYSTEM (INDIA) 669 JAIN INFRAPROJECTS 659 STERLING BIOTECH 656 RADIKAL FOODS 646 FIRESTAR INTERNATIONAL 643 G.E.T. POWER 601 SURANA INDUSTRIES 594 INDIAN TECHNOMAC COMPANY 590 ZYLOG SYSTMES 579 INDIAN TECHNOMETAL COMPANY 575 SHILPI CABLE TECHNOLOGIES 572 J.M.D. OILS PVT LTD 567 BASE CORPORATION 533 UNITECH LIMITED 533 TOTEM INFRASTRUCTURE 528 AVANTHA HOLDINGS 521 ARVIND REMEDIES 521 PUNJ LLOYD 518 PATHBREAKING PROJECTS LIMITED 504 STERLING SEZ AND INFRASTRUCTURE 495 SHREE BANKEY BEHARI EXPORTS 479 BS LIMITED 477 KWALITY LIMITED 475 LOHA ISPAAT LIMITED 474 BHARATI DEFENCE AND INFRASTRUCTURE 461 SPANCO LIMITED 461 SUNIL HITECH ENGINEERS 461 VISA POWER 458 KRISHNA KNITWEAR TECHNOLOGY 456 CENTURY COMMUNICATION 454 ACIL LIMITED 453 ARAVALI INFRAPOWER 443 CORPORATE POWER 441 ALFARA'A INFRAPROJECTS 434 KANISHK GOLD 431 PRAKASH VANIJYA PRIVATE 431 USHER AGRO 426 BHADRESH TRADING CORPORATION 426 PIXION MEDIA 425 P. INFO SYSTEMS 412 SHREE SHYAM PULP & BOARD MILLS 411 ATHENA CHHATTISGARH POWER 408 VANDANA VIDHYUT 401 COX & KINGS FINANCIAL SERVICE 398 ROTOMAC EXPORTS 388 BIOTOR INDUSTRIES 387 KONASEEMA GAS POWER LIMITED 386 K.S. OILS LIMITED 381 Source: RBI
