38 Wilful defaulters including Nirav Modi, Vijay Mallya fled India in last 5 years

Mangalore Today News Network

New Delhi, Sep 15, 2020: As many as 38 economic offenders who defaulted on repaying borrowed amounts to banks fled the country in a span of five years, starting January 1, 2015 to Dec 31, 2019, under the government’s watch.

The government on Monday informed parliament that the 38 wilful defaulters include Vijay Mallya, Nirav Modi and Mehul Choksi.

Minister of State for Finance Anurag Thakur provided the reply in response to a query on whether the Centre has any data on businessmen including those who migrated to other countries after obtaining loans fraudulently during last 5 years.

Read | Govt issues strict directions to deal with fugitive economic offenders

Thakur said, “Central Bureau of Investigation (CBI) has apprised that 38 persons involved in the cases registered by CBI related to financial irregularities with banks fled the country during 1.1.2015 to 31.12.2019.”

Thakur submitted a written reply in the Lok Sabha that stated “action is taken as per law in such cases”.

The ministry informed the house that Enforcement Directorate had earlier appraised that under the Prevention of Money Laundering Act, 2002, application for Red Corner notices were filed against 20 economic offenders and extradition requests were sent out in 14 cases to several countries.

It added that proceedings were on against 11 persons under the tough Fugitive Economic Offenders Act, 2018.

Government data indicates that between January 2019 and December 2019, 11 economic offenders fled the country while 27 have managed to slip out till January 2019. These 27 individuals face charges of economic offences and loan default.

Ministry of Finance also informed the members of the Lok Sabha that along with the action initiated by the law enforcement agencies, a slew of policy measures have now been implemented for preventing businessmen and individuals from fraudulently obtaining loans and then fleeing the country.

Thakur said that measures included Fugitive Economic Offenders Act, 2018, under which banks have been directed to make submission of a certified copy of the passport of promoters/directors of companies. It is mandatory for those availing of loans of more than Rs 50 crore.

Replying to a similar question on wilful defaulters on June 24, 2019, the finance ministry had stated: “Wilful defaulters have been acted against comprehensively. As per data reported by nationalised banks till 31.3.2019, suits for recovery have been filed in 8,121 cases. In cases involving secured assets, action under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has been initiated in 6,251 cases.”

The ministry said that FIRs have been registered in 2,915 cases against wilful defaulters in accordance with Reserve Bank of India’s instructions on initiation of criminal proceedings wherever necessary.

As per RBI’s instructions, wilful defaulters are not sanctioned any additional facilities by banks or financial institutions, and their unit is debarred from floating new ventures for five years.

The govt also listed tough measures taken by the Securities and Exchange Board of India like the Substantial Acquisition of Shares and Takeovers (Second Amendment) Regulations, 2016, barring companies with wilful defaulters as promoters/directors from accessing capital markets to raise funds.

The Govt has said in June 2019 that the Insolvency and Bankruptcy Code, 2016 debarred wilful defaulters from participating in the insolvency resolution process. Additionally, Public Sector Banks (PSBs) can also decide on publishing photographs of wilful defaulters, as per the RBI’s instructions.

Heads of PSBs were also empowered to request for issue of Look Out Circulars (LOCs) for wilful defaulters.

As per data reported by nationalised banks, an amount of Rs 7,654 crore has been recovered from wilful defaulter accounts between 2014-2019.


courtesy: IndaiToday