At least 38 financial offenders who defaulted on repaying borrowed loans to banks left the country within five years, between January 1, 2015 to Dec 31, 2019, under the government’s vision, the centre informed the parliament on September 14.
The defaulters include-Vijay Mallya, Nirav Modi and Mehul Choksi.
Minister of State for Finance Anurag Thakur, in a reply to a query on whether the Centre has any data on businessmen including those who fled India after getting fraudulent loans in the last 5 years. The minister 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.’
He informed the Parliament that Enforcement Directorate (ED) was earlier informed that under the Prevention of Money Laundering Act, 2002, application for Red Corner notices were filed against 20 financial offenders and extradition requests were sent out in 14 cases to many countries.
It added that proceedings were on against 11 people under the Economic Offenders Act, 2018.
Government data shows that between January 2019 and December 2019, at least 11 economic offenders left India while 27 have managed to escape till January 2019. These 27 individuals face charges of economic offences and loan default.
Ministry of Finance also said that along with the action started by the law enforcement agencies, multiple policy measures have also been implemented for stopping businessmen and individuals from fraudulently getting loans and then fleeing the country.
Thakur said that measures included Fugitive Economic Offenders Act, 2018, under which banks need to make submission of a certified copy of the passport of promoters/directors of companies.
The regulation is mandatory for those obtaining loans of over Rs 50 crore.
The finance ministry 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 the central bank’s instructions. As per RBI’s directives, wilful defaulters are not sanctioned any additional facilities by financial institutions, and their unit is banned 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, restricting companies with wilful defaulters as promoters/directors from accessing capital markets to raise funds.
As per data collected from nationalised banks, nearly Rs 7,654 crore has been recovered from wilful defaulter accounts between 2014-2019.
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