In India’s biggest campaign to trace and track Non-Performing Assets (NPA) files. In the 100 day campaign we exposed the many companies and individuals that ran away without repaying the big loan amounts. Today we bring you the case number 31 of our NPA list. The case is about Surya Vinayak Industries Private Limited. The company is mentioned 4 times in our NPA list and allegedly owes an amount of 391 crore rupees. This case remains unique since this company already popped up in our investigation in case 8 under allied Perfumers Pvt Ltd. After digging further into that case, today we bring you more insight into this company in order to reveal how web of shell companies allegedly manage to dupe banks of crores by taking loans one after the other.

 

Case file: 31

Name: Surya Vinayak Industries Pvt Ltd

NPA amount: 391 crore

Bank: Central Bank of India, State Bank of Travancore, Punjab National Bank and State Bank of Mysore

 

The company first popped up in our investigation during our investigation in case file 8 of allied Perfumers Private Limited, another company that the same directors were running that in itself was a 50 crore loan default. Here’s an example of those that run NPAs across a swathe of companies allegedly repeat offenders. This company is heavily into agro related commodities that was their core business. The registered address of the company is 11 Prem Sadan, Rajendra Place, New Delhi.

According to the RoC records with the Ministry of Corporate Affairs, the company was incorporated in august 1996 with an authorised capital of 32 crore rupees. The company held its last AGM in September 2011 and filed its last balance sheet in March 2011. The roc records have listed the company directors as Sanjeev Agarwal, Rohit Chowdhary and Sanjay Jain, who also appear on the NewsX NPA list with an addition of multiple other directors.

While we have previously investigated another company run by the same men, this time we have dug further about this company. This case has reveals how allegedly a web of shell companies are created, and how they allegedly manage to dupe banks of crores by running ponzi-style rackets, round tripping loans with ghost firms. It’s one of the biggest challenges to the war on NPAs. That’s why it’s crucial to unravel, understand and demolish.

As per the roc records, there are a total of 18 pages worth of loans with 175 entries, of which 135 loans have been satisfied and the rest 40 loans are still pending. Yes, that’s right, a total of 40 loans taking the total to a little over 2,700 crore rupees.

We hit the ground and decided to check the registered address of the company and we found that new occupants had taken over the building. A man who spoke to us told us that a few bank officials keep visiting the premises to enquire about Surya Vinayak.

A notice issued by Allahabad Bank, who called for an auction in August 2013, reads, “It shows Surya Vinayak Industries Limited as a borrower and mentions 3 guarantors including Sanjay Jain and Rajiv Jain. It further shows that the bank was aiming to recover 365 crore rupees but there are two properties listed on the notice with a total reserve price of just 64 crores. So the bank was hoping to recover 365 crores with the collateral valued 64 crores, that’s an unbelievable difference. Which is less than 20 % of the loan amount.

During the course of our investigation, we found a media report from April 2017 that alleges said the CBI arrested 4 directors of Surya Vinayak for allegedly cheating a consortium of banks to the tune of 2,240 crores. It further alleges that the FIR was first filed in 2014, and the arrest was finally made three years later in 2017 when the CBI suspected the directors were trying to flee the country.

How exactly did these men manage this alleged fraud? One thing that remain consistent throughout these reports is the fact that the directors allegedly used more than 100 shell companies to divert money borrowed from the banks.

A report from June 2017 alleges that the CBI had registered a case against 6 directors of Surya Vinayak industries ltd for allegedly cheating Development Bank of Singapore Ltd of 122 crore between 2007 to 2012. It also alleges that the directors of the company created shell firms to show bogus sale and purchase of Agro commodities and they allegedly submitted forged and fabricated documents to increase their credit limit.

Another media report from June 2017 goes on to allege that the RBI intervened by seeking an explanation from public and private sector banks on why no action was taken despite reg flags on loans provided to this company. While our paper trail doesn’t end here, we came across another address under which the company is registered. When we spoke to the owner of the building, who is also incidentally an Aggarwal, he denied ever having heard of Surya Vinayak.

As we looked further, we found a media report from August 2017, it alleges that 2 directors of this company Sanjay Jain and Rajiv Jain were arrested by the probe agencies on August 22 and were sent to 3-day ED custody by the court. So according to media reports, the directors were allegedly arrested in April last year and then again in August.

Then we came across another media report, it goes on to allege that the accused directors were granted bail in a separate CBI case on the same matter. Further into the paper trail we came across this report from December 2017. It reveals that a Delhi court granted bail to the directors Sanjay Jain and Rajiv Jain who were earlier arrested on the case registered by Enforcement Directorate.

So they were under the scanner for allegedly defaulting on multiple loans pertaining to multiple companies, had the company registered under multiple addresses and yet the directors found their way out of jail, despite case after case, arrest after arrest.

So this is what we know, Surya Vinayak was started by Sanjay Jain in 1997 on our NPA list, the company owes 4 banks a cumulative of 391 crore rupees and on the roc records, it has 40 pending loans summing up to a little over 2,700 crore in 2013, Allahabad bank called for an auction of 2 of the company’s properties. The reserve price both companies added to just 64 crore rupees. Where in the bank was aiming to recover a whopping amount of rupees 365 crore.

According to media reports, an FIR was filed against 4 directors of Surya Vinayak in 2014, the CBI arrested all 4 directors in April 2017. It further revealed that again in August 2017, 2 directors Sanjay Jain and Rajiv Jain were arrested and sent to ED custody for 3 days and finally in December 2017, all directors were granted bail in cases filed both by CBI and ED.

They found their way out of jail multiple times and now we don’t know where they are..Case after case we’ve seen that alleged losses are unearthed and the same people are arrested multiple times…this is a microcosm example of the NPA racket in the country…directors take loans, sink them, start new companies, take more loans, roundtrip them, use fraudulent bills, stock records, then take out more loans…dozens of companies get formed in a convuluted web…that’s what’s bizarre…if we can do a basic check and discover the web, you’d think auditors and banks should be able to a better job…how do existing defaulters manage to fool the system for so long?

That’s how loans worth a few dozen crores become multi-thousand crore defaults in white collar crimes the directors get bail, nothing happens. That’s the broken system we need to fix.

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