Yashovardhan Birla, chairman of the Yash Birla group, was declared a wilful defaulter on Sunday by Kolkata-based UCO Bank after one of his group companies, Birla Surya, defaulted on loans of Rs 67.65 crore extended by the bank.
According to a public notice issued by UCO Bank, which also carries Yashovardhan Birla’s photograph, Birla Surya was sanctioned a credit limit of Rs 100 crore of fund-based facilities for the purpose of manufacturing of multi-crystalline solar photovoltaic cells from the bank’s flagship corporate branch at Nariman Point, Mumbai. The present balance outstanding is Rs 67.65 crore, in addition to unapplied interest from the date of the account turning into a non-performing asset (NPA).
“Due to non-repayment of dues to the bank, the account was declared NPA on 3 June 2013. The borrower has not repaid the dues owed to the bank despite several notices,” UCO Bank said in the notice, adding, “the borrower company and its directors, promoters, guarantors were declared as wilful defaulters by the bank and their name reported to the credit information companies for public information.”
A borrower is tagged a wilful defaulter if he/she defaulted in meeting repayment obligations despite having the capacity to repay. Or, when the funds were not utilised for the specific purposes for which the finance was availed and were diverted for other purposes.
According to RBI norms, when a promoter of a company is listed as a wilful defaulter, his/her access to funding dries up for the existing business and also for any of the companies where he or she is a director.
Ironically, of all the banks, Yashovardhan Birla has been listed as a wilful defaulter by UCO Bank, the one that was founded by his great grandfather Rameshwar Das Birla’s brother Ghanshyam Das Birla in 1943.
Yashovardhan Birla is the director of Birla Surya and also chairman of the Yash Birla Group which has more than a dozen companies — including Zenith Steel, Birla Power, Birla Lifestyle and Shloka Infotech among others. The group had come under government’s radar earlier this year as well when the ministry of corporate affairs directed an investigation into the three Birla firms — Birla Cotsyn India Ltd, Birla Shloka Edutech Ltd and Zenith Birla (India) Ltd — based on a September 2018 inspection report that has alleged diversion of funds by the firms.
Source: News18