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In May this year, when Kolkata-based UCO Bank decided to “name and shame” some of its defaulters, it zeroed in on Nitin Kasliwal, chairman of S Kumars Nationwide.
The bank published his pictures in leading newspapers, as a defaulter on a Rs 110-crore loan. The loan was taken by Reid & Taylor; Kasliwal was a guarantor. It was the first time any bank had published the picture of an industrialist who’d defaulted on a loan. Government-owned banks regularly publish picture of small loan defaulters in newspapers but have seldom touched big ones.
The move came after Finance Minister P Chidambaram said while many companies were getting sick, their promoters remained rich. Indian banks have written off corporate loans worth Rs 1 lakh crore in the past 13 years, according to the Reserve Bank of India.
Kasliwal did not speak to this newspaper when contacted over telephone. His office did not give his email address.
A list of prominent defaulters published by the All India Bank Employees Association (AIBEA) last week identified S Kumars Nationwide as one of the top ones. The company owes close to Rs 3,000 crore to government-owned banks, it appears.
Public naming was resorted to as other steps to recover money failed. “In spite of repeated reminders, requests and persuasion, the borrower has not liquidated the liabilities of the bank,” UCO said in its May notice, adding this had been issued in the public interest.
Bank unions say big borrowers such as S Kumars are eating into banks profitability. “Huge profits are diverted to provide for bad loans in the banks. No wonder the total of fresh bad loans in the last four years have increased to Rs 3,15,465 crore,” says C H Venkatachalam, general secretary of AIBEA. “One of the main adverse effects of banking deregulation is the increase in bad loans in banks, where the big borrowers take loans and do not repay."
For the Kasliwals, the fall from one of Mumbai’s leading business families to the newspapers as a defaulter is a case study of lost opportunities. The group was set up in 1948 by two brothers, Abhayakumar Kasliwal and Shambhukumar Kasliwal. Abhayakumar's sons, Ambuj and Warij, and Shambhukumar ‘s children, Vikas, Nitin and Mukul, decided to split in 2008.
In the agreement, Mukul and Warij decided to work in partnership. Nitin received S Kumars Nationwide and Vikas was given charge of Shree Ram Infrastructure, now building Mumbai’s tallest tower. Ambuj Kasliwal was given Shree Ram Textiles, with properties in the Mumbai suburbs.
But S Kumars Nationwide, which once hired filmstar Amitabh Bachchan as brand ambassador for its Reid & Taylor brand, soon started haemorrhaging. For 2012-13, the company made a loss of Rs 414 crore on revenue of Rs 3,395 crore, as compared to a profit of Rs 179 crore in 2011-12 on revenue of Rs 3,512 crore. Its stock investors also lost wealth; the share quoted at Rs 5.80 a share on Monday from a peak of Rs 178 in November 2007.
The company’s plans for an initial public offering of Reid & Taylor has been stuck since 2011. And, the banks are now getting ready to sell its assets.
With inputs from Sharleen DSouza.
