Tag: promoters

UP police files FIR against SREI promoters, directors

Banking & Finance

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The Uttar Pradesh police has registered a first information report (FIR) against crisis-ridden SREI Group’s promoters and directors of its certain companies for an alleged bank fraud. The FIR was registered at a police station at Kautwali Jaunpur, Uttar Pradesh on the basis of a complaint filed by one Bhupendra Nath.

The Jaunpur police station has now forwarded the matter to the Economic Offences Wing (EOW).

The Jaunpur Police has, in the FIR, named 22 directors and promoters of SREI Group under U/S-420/ 467/ 468/ 471/ 474/ 476/ 323/ 504/ 506/ 511 R/w-120-B of Indian Penal Code.

When contacted, brothers Hemant Kanoria and Sunil Kanoria, former promoters of SREI Infrastructure Finance, said they were not aware of any such FIR.

It maybe recalled that the Reserve Bank of India had, on October 4, superseded the board of SREI Infrastructure Finance Ltd (SIFL) and SREI Equipment Finance Limited, owing to governance concerns and defaults by the the two companies in meeting their various payment obligations. Rajneesh Sharma, Ex- Chief General Manager of Bank of Baroda, was appointed as Administrator of these companies.

FIR COMPLAINT

The FIR has been registered upon the complaint of one Bhupendra Nath who went to Srei-run Jan Suvidha Kendra for some work, and there he was allegedly duped by the employees of Srei. Bhupendra Nath found that many alleged criminal activities were being carried out at the Jan Suvidha Kendra, including bank fraud of more than ₹16,000 crore. He also reported the fact that at the Jan Suvidha Kendras, money was charged at the whims and fancies of the employees and the amount varied from ₹1,000 to ₹2,5000 for the works which are either free or for which a very nominal fee of not more than ₹100 is charged.

Initially, he filed the police complaint and seeing no effective action he approached the court with 4,000-5,000 pages documentary evidence; upon which the Chief Judicial Magistrate ordered the registration of FIR against the accused persons. The 29-pages of the FIR covers detailed methodology as to how the Jan Suvidha Kendras are run and also how the alleged bank fraud to the tune of ₹16,000 crore was perpetrated through such Kendras.

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Banks explore the option of invoking personal guarantee of promoters, BFSI News, ET BFSI

Banking & Finance

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New Delhi: Armed with Supreme Court order, banks may invoke personal guarantees of tycoons ranging from Venugopal Dhoot to Kapil Wadhawan to recover unpaid loans from their delinquent firms, sources said Monday.

According to an estimate, the top 10 personal guarantors have guaranteed debt of over Rs 1.6 lakh crore. Among the big names, former promoters of Bhushan Steel and Power Sanjay Singhal and his wife Aarti Singhal had furnished personal guarantees worth up to Rs 24,550 crore to take loans from a consortium of bank-led by State Bank of India (SBI).

The former promoter of Reliance Communications, Anil Ambani, has also given a personal guarantee against the loan taken. Erstwhile promoter Wadhawan stands guarantee to loans taken by DHFL, which is sitting on a debt of about Rs 90,000 crore, while Dhoot has also given a personal guarantee to a portion of Rs 22,000 crore loan to Videocon.

The Supreme Court in May had held that the November 15, 2019 government notification allowing creditors, usually financial institutions and banks, to move against personal guarantors under the Insolvency and Bankruptcy Code (IBC) was ‘legal and valid’.

Post the judgement, a senior official of a public sector bank said banks are assessing the level of involvement of those directors who pledged their personal guarantee against the loan.

After the assessment, another banker said, banks would move National Company Law Tribunal (NCLT) for invoking personal guarantee as part of the recovery process.

The official said that banks have started receiving calls from some of the promoters for exclusion of their personal guarantee from the non-performing assets. Some of them are coming forward to resolve bad loans to save their personal wealth.

Most of the promoters thought that once their case is admitted under IBC, their past sins and obligations cease, the official said.

However, the order has generated fear among the promoters and directors who pledged their personal guarantee of losing their personal wealth as part of the resolution process, the official said, adding, the personal guarantee angle would expedite the resolution process as the guarantor stands at risk of losing personal property.

The creditor-debtor relationship has got a leg up and this will minimise chances of default in the future.

The concept of ‘guarantee’ is derived from Section 126 of the Indian Contracts Act, 1872. A contract of guarantee is made among the debtor, creditor and guarantor. If the debtor fails to repay the debt to the creditor, the burden falls on the guarantor to pay the amount.

The creditor reserves the right to begin insolvency proceedings against the personal guarantor if the latter does not pay. Usually, promoters of big businesses submit personal guarantees to creditors to secure loans and assure repayment.

During the hearings, the government had justified the November 2019 notification extending bankruptcy proceedings to personal guarantors. Attorney General KK Venugopal argued that by roping in guarantors, there was a greater likelihood that they would “arrange” for the payment of the debt to the creditor bank in order to obtain a quick discharge.



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IndusInd tanks after order against Hinduja Bank resurfaces, BFSI News, ET BFSI

Banking & Finance

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New Delhi: Shares of IndusInd Bank tanked as much as 7 per cent intraday on Thursday after year-old reports of the Cayman Island Monetary Authority resurfaced, spooking investors. The reports mentioned about cancelling Hinduja Bank‘s licence.

Shares of the private lender plunged 7 per cent to Rs 964.75 by midday on Thursday. However, it later recovered from day’s low to trade at Rs 1,007, dow 2 per cent, at 1.50 pm (IST). BSE sensex was trading at 203.07 points, or 0.39 per cent, up at 52,052 at that time.

Multi-industry conglomerate Hinduja group are the promoters of IndusInd Bank, and it also controls the Geneva-headquartered Hinduja Bank.

In the May 2020 order, the Cayman Islands Monetary Authority (CIMA) had cancelled the Hinduja Bank’s permit, citing rule violations and governance issues. The CIMA said the bank had failed to prepare adequate anti-money laundering policies.

The violations included non-compliance to money laundering rules, appointment of directors and disclosure of certain details in connection with the sale of shares of the bank, the report said.

The CIMA order added that Hinduja Bank could not maintain a minimum net worth and failed to submit its audited financial statements.

Promoters hold 16.55 per cent stake in IndusInd. As on March 31, 2021, Indusind International Holdings held 12.61 per cent and Indusind Limited held 3.94 per cent.

In a communication to stock exchanges, IndusInd Bank denied reports that said bank is a subsidiary of Hinduja Bank calling it “malicious, untrue and baseless.”

The Hinduja Bank became a Swiss-regulated entity in 1994 after being established in 1978. The bank operates in many places around the world, including Dubai, London, Paris, New York, Chennai, Mumbai, Mauritius and Cayman Islands, it said.



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