Thuggery at Cosmos Bank (12/08/2018)

Pratibha Shipping Limited


Directors:

1. Mr. Sunil Anandrao Pawar
2. Mr. Suresh Anandrao Pawar
3. Mr. Madan Anandrao Pawar and
4. Mr. Suhas Anandrao Pawar 

Cosmos Bank has extended Rs.157.51 crore from its Dadar Branch. The loan was secured against hypothecation of ramshackle ships bought by the Borrower Company is auction held in Hong Kong and Singapore.

This borrower has also exposed other banks as follows:

Axis Bank: Rs.101.25 crore
Corporation Bank: Rs.78.98 crore
Saraswat Co-operative Bank: Rs.182.50 crore
Bank of India: Rs.25.00 crore

Total exposure of banks is Rs.545.24 crore. The Company is under liquidation.

Cosmos Bank had first extended a loan of Rs.15.76 crore to this Company in July 2003. At that time many Directors had gone for a vacation to Hong Kong at the Company’s expense. This corrupt practice was spilled by one of the Directors CA Sunil Sabnis. The scrutiny of passports of these delinquent Directors can reveal much more than what is known to a common man like me.

The practice of the Company is to buy the discarded ships at some auction and then spend heavily on renovation and making them sea worthy.

The cursory look at the performance of this borrower throws the following figures:

Company’s profit for the year 2009-10 was Rs.55.29 crore. The same came down to Rs.5.61 crore in FY 2010-11. The current liabilities rose from Rs.42.54 crore in 2009-10 to Rs.83.42 core. The situation further worsened in FY 2011-12.

According to the Statutory Auditors report for FY 2010-11, the Company had not defaulted in repayment to any Bank. This clean report must be taken with a pinch of salt.

On 26/08/2011, Pratibha Shipping Limited submitted a loan application to Cosmos Bank for a loan of Rs. 25 crore. The application was approved by the Board of Directors of Cosmos Bank in its Board Meeting held on 30/08/2011 vide Resolution No. 5(2/7) and issued the sanction letter.

The purpose for which the loan was sought by PSL was stated to be “for the purpose of payment to creditors”.

Following questions arise:

1. How can the Bank give loan of Rs.25 crore for the purpose of payment to creditors?
2. Was it not a grave – or shall I say criminal? – negligence on the part of the entire Board who attended the meeting on 30/08/2011 and obligingly accorded their sanction?
3. What are the compelling reasons for the Bank to step into the shoes of unpaid unsecured creditors by throwing good money of depositors?

This clearly shows that the PSL was on the verge of collapse. Yet the Bank chose to sanction the loan so hurriedly.

The loan application was submitted on 26/08/2011. The Board and the Credit Staff and the Expert Risk Analyst of Cosmos Bank scrutinized the proposal in 3 days and the Board magnanimously sanctioned the loan of Rs.25 crore and replaced the unpaid creditors to the tune of Rs.25 crore.

The Company presently owns and/operates eight vessels namely Mt Pratibha Cauvery, Mt Pratibha Indrayani, Mt Pratibha Chandrabhaga, Mt Pratibha Warna, Mt Pratibha Tapi, Mt Pratibha Neera, Mt Pratibha Koyna and Mt Pratibha Bheema.

This additional loan was secured only by creating charge on their ramshackle ships Pratibha Cauvery, Prathibha Chandrabhaga and Pratibha Indrayani. As usual, this borrower enjoyed extreme privilege of not giving any collateral security or even personal guarantee of any of the Directors.

Is this not an absolute fraud on depositors’ money?

Total of Rs.545.24 crore are sunk. The Company went into liquidation in 2013-14. No collateral. No personal guarantees of any of these Directors. All is hunky dory for the defaulters and scamsters.


When I asked Milind Kale, Mukund Abhyankar and Krishnakumar Goyal abot the recovery from the personal assets of the Directors, they explained that no personal guarantees are taken and therefore their personal property cannot be attached.

This is another case how bank thuggery is so easy in India. And if the borrower has political connections, it is a bonanza.

The connivance of the Board is thus prima facie visible. The matter needs to be investigated by the Agencies and the delinquent Directors need to be charge sheeted.

Incidentally, this company has many subsidiaries and/or associate companies, more than half of which are struck off by the ROC sometime after 2012.

They are as follows:

1. Pratibh Offshore Private Limited: Struck off.
2. Pratibha Oil & Natural gas Private Limited: Active on paper but defaulter in ROC compliance since 2012.
3. Chandrabhaga Sugars Private Limited: Struck off.
4. Pratibha Logistics Private Limited: Active but habitual defaulter in Bank repayment as well as ROC compliances since 2012.
5. Pratibha Marine Private Limited: Struck off
6. Pratibha Steel Private Limited: Struck off
7. Pratibha Buildcon Private Limited: Struck off.
8. Anand Agro Frams Private Limited: Active but in default with ROC compliances since 2014.
9. Pratibha Airport Developers Private Limited: Struck off
10. Jackfruit and Mango Media Private Limited: Active.

All these companies also need to be investigated by the CBI/EOW.