An Open Letter to Shri Ajit Doval: Addressing the Menace of Superrich Wilful Defaulters
An Open Letter to Shri Ajit Doval: Addressing the Menace of Superrich Wilful Defaulters
An Open Letter to Shri Ajit Doval: Addressing the Menace of Superrich Wilful Defaulters
Posted on 5th January, 2025 (GMT 13:30 hrs)
ABSTRACT
The open letter to Shri Ajit Doval, India’s National Security Advisor, highlights the escalating issue of superrich wilful defaulters undermining the nation’s economic stability. It contrasts the swift penalties faced by ordinary citizens for minor loan defaults with the impunity enjoyed by affluent defaulters, who collectively owe approximately ₹90,000 crore. Public Sector Unit (PSU) banks have written off substantial sums, including ₹68,000 crore during the second wave of COVID-19, raising concerns about financial governance and equity. Despite Red Notices from the National Crime Bureau, international actions, particularly by Interpol, have been ineffective, allowing individuals like Vijay Mallya, Nirav Modi, and Mehul Choksi to evade justice abroad. The letter calls for comprehensive structural reforms to ensure accountability, transparency, and the protection of public funds.
To
Shri Ajit Doval,
The Honourable National Security Advisor of India
Sub: Appeal for Addressing the Rising Menace of the Superrich Wilful Defaulters in India
Dear Shri Doval,
We write to you again with a profound sense of urgency to address a growing and alarming issue that is confronting the Indian economy now more than ever: the rampant rise of superrich wilful defaulters over the past decade. This crisis is not just about identifying financial improprieties, but it also strikes at the very core of our nation’s economic stability and trust in its institutions. The manipulation of public deposits by the affluent, coupled with systemic failures to hold them accountable, jeopardizes the financial security of ordinary citizens and the future prospects of our nation’s economy, which is supposed to be constitutionally based on socialist predispositions.
India’s financial ecosystem faces a grave paradox. Ordinary citizens who default on minor loans often have to face swift and severe penalties from the Banks, including public shaming and asset seizure. Meanwhile, affluent defaulters, who collectively owe approximately ₹90,000 crore, continue to evade accountability time and again under public eye. Public Sector Unit (PSU) banks have written off vast sums of these debts, perpetuating an inequitable system that shields the 1% elite while penalizing the vulnerable. This concurs with the plans to disinvest the entire public sector through the newly emerged Banking Laws (Amendment) Bill (2024).
Banking reforms: Progress or a privatisation trojan horse VIEW HERE ⤡ (As reported on 6th December, 2024 ©Policy Circle)
During the second wave of COVID-19 alone, PSU banks wrote off loans amounting to ₹68,000 crore. While such measures were ostensibly and rhetorically aimed at easing economic distress in the short term myopic vision, they raise critical questions about the whole financial governance and the beneficiaries of these write-offs or waive offs.
Banks Technically Write Off Over Rs 68,000 Cr Loans, Choksi Among 50 Top Wilful Defaulters: RTI VIEW HERE⤡ (As reported on 28th April, 2020 ©News 18)
Despite Red Notices issued by the National Crime Bureau, international action against defaulters has been negligible, especially concerning the Interpol’s apathetic role. Prominent individuals such as Vijay Mallya, Nirav Modi, Mehul Choksi and others live scot-freely abroad, often in countries like the United Kingdom. Interpol’s inaction undermines the global justice system and weakens any effort to bring these defaulters under the purview of any form of trial.
Why India’s red notice requests gather dust VIEW HERE ⤡ (As reported
38 wilful defaulters including Nirav Modi, Vijay Mallya fled India in last 5 years VIEW HERE ⤡ (As reported on 15th September, 2020 ©India Today)
In fact, it is a matter of regret that:
“Interpol has removed its red notice against fugitive Mehul Choksi wanted by India in the $2 billion Punjab National Bank (PNB) fraud based on a representation by the diamantaire, people familiar with the development said Monday. Choksi was added to its red notice in December 2018.”
‘Credible possibility’: Interpol removes red notice against Mehul Choksi VIEW HERE ⤡ (As reported on 20th March, 2023 ©Hindustan Times)
Political and bureaucratic lapses, and in some cases, express partisan complicity, enable this cycle of systemically enabled evasion. This nexus of power and privilege erodes public faith in institutions, creating an urgent need for comprehensive structural reforms to ensure accountability as well as to effectuate a hedge of protection around deposited public money.
Union Finance Minister Nirmala Sitharaman recently informed the Lok Sabha that public sector banks have recovered ₹14,131.6 crore through the sale of assets belonging to fugitive businessman Vijay Mallya. This recovery is part of broader efforts by the Enforcement Directorate (ED), which has restored assets worth ₹22,280 crore to victims or rightful claimants in cases involving economic offences. In addition to Mallya’s case, the ED has restored properties worth ₹1,052.58 crore to banks in the Nirav Modi case and attached properties valued at ₹2,565.90 crore in the Mehul Choksi case, pending auction.
Rs 14,131.6 crore recovered from Vijay Mallya’s asset sales: FM Sitharaman VIEW HERE ⤡ (As reported on 18th December, 2024 ©Business Standard)
However, looking at the much broader spectrum that still remains unaddressed in the context of amplifying bankruptcies, the staggering amount of ₹90,000 crore approximately owed by these defaulters, if recovered in its entirety, could have transformed India’s subsistent economic landscape. These funds could have been directed toward crucial social and infrastructural projects, such as healthcare, education, and sustainable rural reconstruction. Instead, resources are often redirected toward politically spectacular initiatives, leaving pressing needs unmet.
The total amount in superrich wilful default surpasses what is necessary for the sustainable development of India’s political economy; however, it is often misallocated toward initiatives such as statue nationalism, the construction of temples, the new Parliament building, the Central Vista Project, the bullet train, the Vishwanath Mandir corridor, and the Char Dham project, among others.
Top 100 wilful defaulters owe lenders Rs 84,632 crore VIEW HERE ⤡ (As reported on 9th February, 2021 ©Economic Times)
RBI reveals top 100 wilful defaulters; 2,664 corporates owe Rs 1.96 lakh crore VIEW HERE ⤡ (As reported on 23rd December, 2024 ©The Indian Express)
Rhetorical efforts to recover black money have yielded limited results, such as the 15-20 lakhs assured to every citizen by our incumbent Prime Minister. On the contrary, Indian deposits in Swiss banks surged by 50% in 2021, reaching over ₹30,000 crore. This alarming trend underscores the ineffectiveness of current financial controls and policies.
Indian kitty in Swiss banks jumped 50% to over ₹30,000 crore in 2021 VIEW HERE ⤡ (As reported on 16th June, 2022 ©The Hindu)
Simultaneously, there has been a rapid increase in the assets of national political parties, particularly the incumbent ruling party of India, the BJP. This financial windfall coincides with the period when high-profile defaulters evaded justice, raising concerns about transparency in corporate funding of political parties (limited companies) as such.
Whom do we, the citizen of India, blame: the crony ruling party, whose assets are increasing by leaps and bounds or the ramshackled Indian judiciary for failing to meet its duties in this regard?
ANALYSIS OF ASSETS & LIABILITIES OF NATIONAL PARTIES– FY 2016-17 and 2017-18 VIEW HERE ⤡ (as reported on 31 Jul 2019 © Association for Democratic Rights in India ADR)
UPDATED-ANALYSIS OF INCOME & EXPENDITURE OF NATIONAL POLITICAL PARTIES FOR FY 2018-19 VIEW HERE ⤡ (as reported on 25th June 2020) ©Association for Democratic Rights in India (ADR)
ANALYSIS OF DONATIONS FROM CORPORATE & BUSINESS HOUSES TO NATIONAL POLITICAL PARTIES FOR FY 2018-19 (KNOWN DONATIONS ABOVE RS 20,000 ONLY) VIEW HERE ⤡ (as reported on 20 Nov 2020 © Association for Democratic Rights in India ADR)
BJP’s Declared Assets Increased By 627% in 10 Years: ADR Report VIEW HERE ⤡ (as reported on October 17 2017 © BloombergQuint)
BJP highest earner in FY19 at Rs 2,410 crore; TMC’s income spikes 3,628% VIEW HERE ⤡(as reported on January 16, 2020 © BusinessToday)
BJP’s assets increased by 22% in 2017-18, Congress’ down by 15%: ADR VIEW HERE ⤡ (as reported on 01 Aug 2019 © Economic Times)
A more recent report revealed the following:
BJP the richest political party with an income of Rs 2360.844 cr during FY 2022-23 VIEW HERE ⤡ (As reported on 1st March, 2024 ©APN News)
India’s banking sector has been plagued by mismanagement over the past decade, marked not only by massive loan write-offs, but also rising non-performing assets (NPAs), and escalating financial fraud/scam cases. Between FY2014-15 and FY2023-24, Indian commercial banks wrote off loans totaling ₹12.3 lakh crore, a sum comparable to the nation’s annual defense budget.
Banks Write Off Rs 12.3Lakh Crore in Loans, Equal to India’s Defence Budget; No Accountability for Bankers?? VIEW HERE ⤡ (As reported on 17th December, 2024 ©The 420)
Public Sector Banks (PSBs) accounted for ₹6.5 lakh crore of these write-offs over the past five years (FY2020-24). The peak occurred in FY2019, with ₹2.4 lakh crore written off, decreasing to ₹1.7 lakh crore in FY2024.
- As of September 30, 2024, gross NPAs stood at ₹3,16,331 crore for PSBs (3.01% of outstanding loans) and ₹1,34,339 crore for private sector banks (1.86% of outstanding loans).
- In the first half of FY2024, PSBs wrote off loans worth ₹42,000 crore.
- From April to September 2023, 18,461 bank fraud cases were reported, involving ₹21,367 crore—a 28% rise in cases and an eight-fold increase in financial impact compared to the previous year.
The case of the Wadhawan brothers—Kapil and Dheeraj, former promoters of Dewan Housing Finance Corporation Ltd. (DHFL)—highlights the selective, partial enforcement of laws against affluent defaulters. In January 2019, Cobrapost alleged that DHFL had siphoned off ₹31,000 crore through shell companies, implicating the Wadhawan brothers in one of India’s largest financial frauds. These allegations included claims of terror financing allegedly involving the BJP itself, intensifying scrutiny.
Despite serious accusations, DHFL continued its operations until liquidity challenges led to its insolvency in November 2019. Legal actions against the Wadhawan brothers include:
- Wilful Default: In March 2023, IDBI Bank declared them wilful defaulters in a ₹758 crore unpaid loans case.
- Bank Fraud: Accused of defrauding a consortium of 17 banks, leading to a loss of ₹34,615 crore.
- Regulatory Violations: Investigations revealed the diversion of funds through shell companies.
The ill-conceived IBC (2016), while initially heralded as a reform, has struggled to deliver effective resolutions in this context. In Q3 2022, bankruptcy cases increased by 25%, but recovery rates plummeted to 23.45%, with creditors facing steep “haircuts” of 69.6%. This reflects systemic inefficiencies and raises questions about the IBC’s ability to address large-scale defaults.
Bankruptcy cases rise 25 per cent in Q3; recovery lowest at 23.45 per cent: Care Ratings VIEW HERE ⤡ (As reported on 20th February, 2023 ©The Economic Times)
Shri Doval, as a respected, seasoned authority on national security and governance, your intervention is crucial to address this multifaceted crisis. We urge you to take steps in this regard so as to:
- Strengthen regulatory frameworks to ensure accountability for both defaulters and complicit institutions.
- Advocate for transparency in political funding to address potential conflicts of interest.
- Engage with global law enforcement agencies to expedite the extradition of superrich defaulters.
- Promote judicial and administrative reforms to rebuild public trust in India’s financial systems.
India’s economic resilience depends on a financial ecosystem that prioritizes accountability, equity, and justice. The time to act is now.
We sincerely hope that you shall hear our plea and advance your appeals to the higher officials as necessary.
Yours Sincerely,
Concerned Citizens for Economic Justice
On Behalf of ONCE IN A BLUE MOON ACADEMIA (OBMA)
SOURCES:
https://onceinabluemoon2021.in/2024/12/30/the-great-indian-heist-exposing-the-crony-bloodsuckers/
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