Case number 48 in the Newsx NPA list is Vishwa Rupa Steel Pvt ltd. According to our list, the company owes State Bank of India Rs 67 crore which has now been classified as an NPA. The registered address of the company is 3A, Mango Lane, Kolkata. According to the data with the registrar of companies with the Ministry of Corporate Affairs, Vishwa Rupa Steel Pvt Ltd was incorporated in August 2004 with an authorized capital of Rs 15 crore. The company held it’s last AGM in September 2013 and filed its last balance sheet in March 2013. According to the ROC records, the directors of the company are Dhiraj Kumar Thard and Som Nath Ghosh.
The same directors appear on our NewsX NPA list as well with an addition of Sushma Thard. This is a case that blows the lid off the complicated web of loans, money cycling and round-tripping that goes on when the same directors run a group of companies that all have large debts on their books, the complicated financial maze that unravels in this case bit-by-bit reveals how when most people struggle with the paperwork to run even one successful company, some directors run dozens and dozens when a loan goes to one company who knows where the money actually ends up loans from one firm are used to pay back loans of other firms, where the entire group becomes about money management rather than actually running a successful business.
Upon further inspection of the ROC records, we found that the company started allegedly defaulting on loans 5 years after the date of its incorporation. The company took 4 loans from State Bank of India. The first loan worth Rs 50 crore was taken in 2009, a second loan worth Rs 7 crore was taken in 2010, another loan worth Rs 6 crore in the same year, and a 4th one worth Rs 36 crore in 2011. Taking the total to Rs 99 crore.
Then we decided to look up the directors on the ROC records. What we found was shocking. We’ve investigated several cases where the same directors have been running multiple companies but in this case, the number of companies collectively owned by both the directors is 19 that’s right, 18 other companies apart from Vishwarupa Steel Pvt Ltd and most of them under the banner of Vishwa Group.
A closer examination of the group reveals that of the 18 common companies, 12 other companies were allegedly defaulting on loans taken from different banks.
The first company took a loan worth Rs 68 crore, the 2nd one is allegedly defaulting on a loan worth Rs 6 crore, two more companies took a loan worth Rs 15 crore another company with a pending loan worth Rs 52 crore. This one again with a Rs 15 crore loan, the 7th company took a loan worth Rs 53 crore and so on and so forth.
So despite allegedly defaulting on 4 loans from state bank of India under Vishwa Rupa Steel Pvt Ltd during the years 2009-2011. The directors of the company allegedly defaulted on loans under 12 other companies, from multiple banks and all of these companies were started between the year 2004 to 2016.
Then we put out paper investigations on hold and decided to hit the ground. The guard who was deployed at the registered address of the company said that as of now the company wasn’t operating from this particular address. Further digging into the paper trail we found this e-auction notice taken out by Allahabad Bank in 2014.
It mentions Dhiraj Thard, Sushma Thard and Somanth Ghosh as the borrowers, it further reveals that the bank was aiming to claim Rs 5 crore while the reserve price of the property put on auction was just about Rs 40 lakh. When we enquired further, we were told that the property was sealed by a bank and a Kolkata High Court order stating that the office is under the custody of high court liquidator, was pasted on the entrance of the office premises.
Further digging into the paper trail, we came across this media report which alleges that Dhiraj Thard, Sushma Thard and Somnath Ghosh collectively defaulted on a loan worth Rs 122 crore taken by SBI Bank. Another media report that reveals 63 wilful defaulter companies along with the amount written off by State Bank of India, mentions Vishwarupa Steel Pvt as a wilful defaulter.
It also reveals that State Bank of India had written off Rs 67 crore worth of bad loans under Vishwarupa Steel. We wrote an email to the company, but haven’t heard from them. We also wrote to the bank, but are yet to receive a response from them.
So this is what we know. Dhiraj Kumar Thard started Vishwa Rupa Steel Pvt Ltd in 2004. Somnath Ghosh joined him as a director in 2009. On our NPA list, the company allegedly started defaulting on loans in 2009. On our NewsX NPA list, the company owes State Bank of India Rs 67 crore while on the ROC records, it’s allegedly defaulting on 4 loans worth a total of Rs 99 crore from the same bank.
The directors of the company collectively own 18 other companies, of which 12 companies are defaulting on multiple loans. In 2014, Allahabad Bank put out a property of the company on auction, wherein they were aiming to claim Rs 5 crore against the reserve price of Rs 40 lakh we visited the registered address, we found that the property had been sealed by the bank.
In this marathon investigation, here’s a case that reveals 4 clear things. When directors are running groups of firms, some only end up existing on paper with similar names used as covers to get past guidelines and rules to take out new loans. The new loans often end up being round-tripped to pay off re-negotiated rates on old loans, rather than going into the business.
The banks face an important call in when to decide to stop throwing good money after bad in the hope that the loan would be paid off and even when banks write off debts off one firm, other group firms continue to operate. The collateral properties are never even in near the amount due value and get stuck in red-tape that makes them difficult to auction, a process that goes on for years.