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With his string of failed ventures, C. Sivasankaran has also been mired in numerous violations and illegalities, frauds and banking crimes.

 

Due to the stringent, extensive and often overlapping information and documents seeking and sharing practices under KYC, CIBIL, FIU reporting, digitization of transactions and compliance and sharing of data between various government departments, all that you need to do, is feed in the PAN/Aadhar number and you will get up to date detailed information about a person, particularly if he is a taxpayer. Doing a background check on a person is just not difficult for those who have authorized access to the PAN/Aadhar connected database, which incidentally includes bankers. It is thus difficult to hide one’s reality and dubious deeds and hoodwink the banking system unless the system itself is willing to be hoodwinked. Data nowadays is extensively shared across government departments, banks, insurance companies etc., such that it is easy to know about a person’s income status, banking track record, tax defaults, loan default, credit card defaults etc. and when such defaults are found, then the banking system blocks the person and refuses to deal with him. A background check is thus a routine formality when you seek a loan or a credit card, and also when a defaulter wishes to settle his outstanding loans with banks. Normally no banker will sanction or settle loans with a person, marked as defaulter or fraudster by the system and as we said, that’s just not difficult to know.

But that does not apply if you are a system favourite or its crony, with access and reach to the powers that be. We saw that happen in the unlawful settlement of loans of Sterling Biotech by banks, whereas its promoter, the Sandesara family should have been prosecuted for the banking and financial crimes committed by them. And now we see it happening in the case of C. Sivasankaran, the Chennai based maverick serial entrepreneur, with a string of business failures and bankruptcies to his credit. He has a list of failed, botched or abandoned ventures including the coffee chain Barista, a telecom venture with Batelco of Bahrain, a DTH venture with Subhash Chandra of Zee TV, a 2500 apartment residential complex at Chennai, a shipping company in Norway, bankruptcy in Seychelles and Finland and many others. His failed ventures are ironically listed in his 2014 profile, which states that he has a conglomerate of companies, with a then combined turnover of $ 3 bn and global interests in hospitality, real estate, shipping, logistic wind energy, palm oil, commodity and minerals trading and agro exports.

With his string of failed ventures, Sivasankaran has also been mired in numerous violations and illegalities, frauds and banking crimes, which include:-

 

1. As alleged by SFIO, defrauding ILFS for a few hundred crores, by giving worthless dud shares as security, for loans taken with the active connivance of the top brass of ILFS i.e. Ravi Parthsarthy, Hari Sankaran and Ramesh Bawa.

2. Fraudulently availing of loans from ILFS in another case, and indulging in money laundering as the ED alleges.

3. ILFS giving him loans, despite him having been declared bankrupt.

4. Directly involved in fraudulent loans of Rs. 600 cr. from IDBI Bank and then laundering it overseas, as alleged by CBI and the ED.

5. By means of corruption, illegally obtaining FIPB approval in respect of a foreign investment of Rs. 3560 cr in Aircel, which was required to be approved by the CCEA and not by the then, FM as P. Chidambaram did in 2006, by tampering papers that showed the investment of Rs. 3560 cr. to be a mere Rs. 180 cr. and illegally brought in that investment.

6. Under investigation by the Canadian authorities for buying a luxury island home, worth millions of dollars, allegedly funded by dirty money, being money swindled/stolen from banks and involving money laundering fraud.

7. Defaulting on his financial commitments of USD 175 mn, to the telecom company Batelco of Bahrain and finally settling/repaying the same when cornered worldwide.

8. Declared bankrupt in Aug. 2014, by the Supreme court of Seychelles, leading to his worldwide properties being put in administration.

 

A person with such a shady and dubious track record, where banks and FIs have been cheated for thousands of crores, should generally be boycotted by the lenders, creditors and the system and not be given any favoured or special treatment and he also deserves no mercy. His company Siva Industries owes about Rs. 5000 crores to banks and other creditors led by SBI, CBI, LIC etc., who have dragged him to the NCLT in July 2019, for a forcible recovery of their dues. A recent report says that all these banks/creditors have agreed to settle their claims of Rs. 5000 cr., for a mere Rs. 500 cr. taking a haircut of 90% and willing to bear a loss of Rs. 4500 cr., and in the process cancelling all their claims against the company and its fraudulent promoter and also withdrawing all legal proceedings, thus settling their claims for a pittance and letting them go scot-free. Such an out of court settlement, particularly where the promoter is mired in scams/frauds is unusual and untenable too. Many other powerful borrowers have tried to do so, but have failed. The Ruias of Essar Steel tried to do so, but failed to convince the creditors, and so was the case of Atul Punj of Punj Lloyd, Venugopal Dhoot of Videocon and Sanjay Singhal of Bhushan Steel, who sought out of court settlements with creditors, but failed. C. Sivasankaran however seems to be a different kettle of fish and clearly has different clout in the system, or else, such a settlement for a pittance, writing off 90% of the dues, would not have taken place.

 

Such instances where giant dues of Rs. 5000 cr. are settled for a mere Rs. 500 cr., raise a disturbing larger picture.

 

1. It exposes the careless, corrupt and pathetic lending decisions of the banks at the inception, where a so-called secured loan has turned out to be virtually unsecured and they are now writing off most of their dues.

2. If the lending to him was evidently not bonafide, so seems this hurried settlement and massive write off of dues by the lenders/creditors.

3. Such settlement for a song speaks volumes of the inefficacy and futility of our recovery mechanisms, where the defaulting borrower is powerful and well connected.

4. If this settlement is finally approved by the NCLT, without looking at the entire scammy picture, then that puts it also in bad light.

5. While the financial system seems to have let off C. Sivasankaran easily, criminal agencies like CBI, ED etc. should not do so.

6. Favoritism, discrimination and cronyism continue to rule Indian banking and if you are well connected and powerful, you will get special treatment, beyond the established rules and regulations imposed on all others.

7. Some like C. Sivasankaran are favourites of the system, irrespective of the party in power. Banks favoured him in the UPA regime and have done so now in the NDA regime.

8. The eagerness of the bankers to settle in such a case, indicates their concealed enthusiasm to protect themselves from criminal investigation.

9. And settlement of dues of Rs. 5000 cr. for a mere Rs. 500 cr. means that the defaulter gets to enjoy the huge loot and perhaps confirms the popular perception that each business failure/bankruptcy, only made C. Sivasankaran richer.

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