In what seems to be yet another mega-default, UCO Bank has put large ads in newspapers calling S Kumar’s Nationwide Limited a defaulter. S Kumar’s makes garments and clothing, and owns the Reid and Taylor label.
From Business Standard:
Fed up with a profitable textile company’s failure to repay its loan, India’s UCO Bank has taken its grievance public, placing newspaper ads last month that brand the industrialist owner of S Kumar’s Nationwide Ltd a defaulter.
The company has made a consolidated profit of 22 cr. in the December quarter, but hasn’t released results since. The first nine months saw over Rs. 86 cr. of net profit, and have accounted for interest of Rs. 534 cr. already; it is likely that any interest payment defaults have occurred after December.
This will be a 3,000 cr. default, it seems, but it seems the company has pledged land, given a promoter guarantee from both CEO Nitin Kasliwal and his company Anjaneya Holding, and pledged shares as well (nearly all promoter shareholding was pledged). But the shares, they won’t yield much at Rs. 4 per share.
And bankers, it seems, are too short sighted to learn. In 2001, S Kumar’s management, it seems, had bounced cheques to the MP government in its power project along the Narmada river. And in 2003, ICRA had downgraded some of its securities to “Default” status. It’s a wonder banks even lent anything to this company within 10 years, but the rules, they only apply to us small people.
