After Rotomac & Nirav Modi, Kanpur-Based Shri Lakshmi Cotsyn Ltd. Defaults On Rs 3,600 Crore Loan From 16 Banks
March 5th, 2018
After the alleged defaulting of over Rs 3,600 crore by Kanpur-based Rotomac Pens, another case of loan default has emerged in Kanpur. Shri Lakshmi Cotsyn Limited (SLCL) has reportedly defaulted on around Rs 4,000 crore provided by a consortium of 16 banks.
The group is now being investigated by the CBI and the Enforcement Directorate (ED).
SLCL manufactures home furnishing products, technical textile products and ballistic products.
Which are the banks involved?
A consortium of 16 banks gave loans to Shri Lakshmi Cotsyn Pvt Ltd.
As reported by News 18, this list includes Central Bank (which is the leading bank of the consortium), Syndicate Bank, Union Bank, Canara Bank, Bank of Baroda, Punjab National Bank, Indian Bank, State Bank of India, Exim Bank, Oriental Bank of Commerce, IDBI Bank, Vijaya Bank, Corporation Bank, Saraswat Bank, Andhra Bank and Edelweiss Estate Reconstruction.
According to India Today, the principal exposure of main banks as of 2017 is Rs 1544 crore:
- Syndicate Bank – Rs 323 crore,
- Bank of Baroda – Rs 248 crore,
- Central Bank of India – Rs 444 crore,
- Union Bank of India – Rs 320 crore,
- Punjab National Bank (PNB) – Rs 209 crore.
SLCL needs Rs 250 crore to continue functioning
SLCL reportedly “needs another Rs 250 crore immediately to run its six factories.”
The Chairman and managing director MP Agarwal told India Today, “An immediate capital infusion of Rs 250 crore is required to run the factories so that the principal amount can be paid from profit earned … In one year, we will be fully operational if we get Rs 250 crore to start with. Another Rs 200 crore would be required after one-and-a-half year.”
Agarwal also said that he has customers and the required workforce. “We are trying to tap some investors and some of them are interested. We will find a solution in three to four months.”
Situation not like Rotomac’s, we won’t flee the country like Nirav Modi, Agarwal says
Even as the country’s banking sector struggles to combat the bad loans crisis and address the mounting scam related to Nirav Modi and the Punjab National Bank (PNB), it was reported recently that Vikram Kothari, the owner of Rotomac Pens, has outstanding loans exceeding Rs 800 crore from various public banks.
According to News18, the banks involved are Allahabad Bank, Bank of India, Bank of Baroda, Indian Overseas Bank and Union Bank of India.
Kothari loaned Rs 485 crore from Union Bank of India and Rs 352 crore from Allahabad Bank. A year later, he reportedly has not paid back either the interest or the loaned amount.
SLCL’s Agarwal, however, says his company’s current situation cannot be compared to Rotomac’s.
“The assessment and comparison are wrong. We invested the loan amount in our factories,” he said, rubbishing rumours that he had bought property abroad and was planning to flee the country.