By Hardik Rajgor Dec. 26, 2018
The face of financial frauds in India in 2018 was Nirav Modi… with dishonourable mentions for Nitin Sandesara, Vikram Kothari, and the OG Bank Chor Vijay Mallya. Let’s hope our public sector banks will take up a New Year resolution: Avoid reckless lending.
f 2016 was all about trying to figure out how Paytm works while standing in long ATM queues, and 2017 was about constantly hitting refresh on the GST website and going through bills thinking “Itna sara tax?”, 2018 was the year to borrow-and-run — rich people borrowed thousands of crores from the banks and fled the country as our childhood chor-police game went global.
Who pays for these scams? The scamsters defraud the banks, the banks are too big to fall and the government has to eventually bail them out with taxpayer money. In short, you and I. Yes, your ₹14 GST collected on a sada dosa at Vaishali Pure Veg Restaurant that should have been used to build a flyover (or a statue) will be used to bail out a struggling bank because some asshole at the upper-management level of a Fortune 500 company decided to game the system. Let’s look at how much 2018 cost us in scams.
Sterling Biotech Loan Fraud Case: ₹5,000 crore
While the country was still hungover from the New Year Party to ring in 2018, there was a major breakthrough in early January when the Enforcement Directorate arrested a former director of Andhra bank in connection with a money-laundering case involving a Gujarat-based pharma company, Sterling Biotech. Nitin Sandesara, director of the company and Rajat Sharma lookalike, reportedly opened over 300 shell companies to launder over ₹5,000 crore that the company had borrowed from a consortium of banks. The financial transactions were so questionable that Sandesara would make for the perfect lead if, God forbid, 50 Shades of Grey were to be remade. However, in what would turn out to be the trend of the year, by September it was found that Sandesara, along with his family had escaped to Nigeria and three months on, the pakdam-pakdai game to get him back into the country continues at the diplomatic level between the governments of the two countries.
Punjab National Bank Fraud: ₹11,300 crore
If Narendra Modi was the face of the BJP for the 2014 general elections, the face of financial frauds in India for the year 2018 was Nirav Modi. While advertisers tried to convince us that diamonds are forever on Valentine’s Day, the Punjab National Bank disclosed that Gitanjali Gems had taken the sparkle out of everything, defrauding the bank to a tune of ₹11,300 crore. Same shit, different day: Another businessman had borrowed money from the banks, refused to pay it back and then fled the country. By the time the news became public, Nirav Modi along with his family had already escaped. Operation Finding NiMo kicked off. Like a typical Garba enthusiast, Nirav Modi moved around the world — from Belgium to Hong Kong to the United States as Gitanjali Gems’ assets were seized.
While others were trying to scam the banks with diamonds and expensive pharma drugs, in a stroke of genius, Vikram Kothari managed to prove to world the might of the ball pen.
Mehul Choksi, Nirav Modi’s mama, was also accused in the fraud. He too turned out to be quite the traveller and after visiting a few countries, eventually settled down in Antigua, from where he now gives tearful interviews about how he has lost everything. The Punjab National Bank fraud unleashed a political storm in India, for the failure of the government to catch hold of the perpetrators.
Rotomac Scam: ₹3,700 crore
While others were trying to scam the banks with diamonds and expensive pharma drugs, in a stroke of genius, Vikram Kothari managed to prove to world the might of the ball pen. Rotomac borrowed to the tune of ₹3,700 crore from a consortium of banks and used the money for certain cooked-up transactions. Basically, Rotomac was like a 10-year-old, who tells mom that he wants the money to buy textbooks but then leaves the house and uses the money to buy ice cream and cricket balls. Unlike other deceitful Hall of Famers who managed to flee the country, Vikram Kothari remained in India and was arrested by the CBI along with his son Rahul Kothari after four days of questioning.
Vijay Mallya: ₹9,000 crore
The King of Good Times had anything but a good time in 2018. The OG Bank Chor, who taught everyone else how to borrow and run, lost his title as the posterboy of financial frauds to Nirav Modi. But despite being 4,767 miles away, Mallya kept us hooked on with his explosive revelations. He first claimed that he had met Arun Jaitley before fleeing the country, which raised the Finance Minister’s blood pressure. Later, during his extradition trial in the UK, he decided to make Arthur Road Jail great again. He claimed that the jail barely gets any natural light and keeping him in such conditions would be a violation of human rights. In what must be the coolest unboxing video ever, the CBI submitted a video of Barrack No 12 of Arthur Road jail where Mallya would be kept, in a London court. Like streets in India before Narendra Modi’s visit, the jail was spruced up for the perfect photo-op. And it did the trick. On December 10, the Westminster Magistrates’ Court ordered the extradition of Mallya, which his legal team have the right to appeal against the higher courts in the UK. The man who taught us the Art of Leaving might just have return.
The year 2018 is when most of these multi-millionaire jhol-wallahs continued living lavish lifestyles in exotic locales, sipping wine at cricket games and inaugurating new stores as part of their Euro Darshan, while the middle-class tax payer continued to be hounded even if he has defaulted on his Vodafone or electricity bill. Let’s hope 2019 will be different. As we aspire to lose weight or read more in the coming year, one hopes the public sector banks in India also take up a New Year resolution: Avoid reckless lending.