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Abu Dhabi, UAEFriday 22 June 2018

The history of bank fraud in India

The Kingfisher tycoon Vijay Mallya is accused in India of fraud and money laundering to the tune of 90 billion rupees. Saurabh Das / AP
The Kingfisher tycoon Vijay Mallya is accused in India of fraud and money laundering to the tune of 90 billion rupees. Saurabh Das / AP

India has been rocked by a number of bank frauds over the years. Here are the ones that have made headlines.

Kingfisher's Vijaya Mallya

The Kingfisher tycoon Vijay Mallya is accused in India of fraud and money laundering to the tune of 90 billion rupees. He fled to the UK and there are efforts underway to get him extradited. Widely considered to be India’s answer to Richard Branson, the flamboyant Indian entrepreneur built up his inherited empire, United Breweries Group, the prized assets of which were its beverages division and Kingfisher Airlines, and lived a lavish lifestyle, buying Formula One and cricket teams, islands and vintage cars. But the collapse of Kingfisher Airlines, which stopped flying in 2012 and had amassed US$1 billion in debt, left him in trouble. State Bank of India has called for him to be jailed as the country’s largest lender tries to recover money it is owed.

Rotomac founder Vikram Kothari

Vikram Kothari, the founder and chairman of Rotomac Pens, based in Uttar Pradesh in north India, has been accused of a 36 billion rupees loan default, on loans taken from a consortium of seven Indian banks. The industrialist and his son Rahul Kothari were arrested by the Central Bureau of Investigation in Delhi last week following a day of questioning. The scandal emerged following the break out of news of the $1.8 billion fraud linked to the jeweller Nirav Modi and after state-run lender Bank of Baroda filed a complaint with the authorities. Properties have been raided in connection with the case. Vikram Kothari denies any wrongdoing.

Jatin Mehta of Winsome Diamonds

A Gujarat-based diamond merchant Jatin Mehta is considered to be one of India's biggest defaulters. He owns a company called Winsome Diamonds and is accused of owing more than 65 billion rupees to a consortium of Indian banks, including Punjab National Bank, which took the biggest hit. He fled India in 2016 and now resides in St Kitts and Nevis in the Caribbean. This case had similarities to the Nirav Modi scandal. Letters of credit were issued on the behalf of Indian lenders to raise money from international bullion banks, but these loans were never paid, leaving the Indian banks exposed.