From the fall of Jet Airway to the PMC Bank Disaster — India Inc. was hit hard several times in the year bygone. Here are the most scandalous affairs and controversies that affected Corporate India in 2019.
Jet Airways Bankruptcy — The Joy of Flying in Limbo
Once India’s biggest private airline, Jet Airways saw a controversy-filled 2019 that ended in suspended operations in April as it ran out of cash.
With no more investors in hand, lenders to Jet Airways have decided to file for bankruptcy in June 2019. The government also ordered a probe into the airline for alleged siphoning of funds and financial irregularities. CEO and Founder Naresh Goyal left the board in Feb.
The report of probe into Jet Airways indicated that the company was involved in malpractices and monumental mismanagement.
In December 2019, Synergy Group and two other bidders emerged as a ray of hope for the airline but nothing has materialized yet.
IL&FS Scam — ₹90,000 crore Vanish into Thin Air
In June 2019, SFIO (Serious Fraud Investigation Office) alleged that the IL&FS’s subsidiary took loans from the lender by showing forged statements and credit ratings.
However, officials said it is just a small part of a much larger fraud case. It involves defaults of an estimated ₹90,000 crore, as the SFIO’s first charge sheet concerns just one entity, IL&FS.
Defaults of an estimated ₹90,000 crore were revealed as SFIO’s first charge sheet concerning IL&FS.
The SFIO filed charges against 30 individuals and entities, including the statutory auditors, with fraud under section 447 of the Companies Act.
DHFL Scam — An NBFC with Shell Companies
In January 2019, web portal Cobrapost accused DHFL promoters of committing financial fraud by creating shell companies, the company was involved in a scam of Rs 31,000 crore.
A total of 32 India and foreign banks lent Rs 97,000 crore to DHFL Group companies.
DHFL promoters committed financial fraud by creating shell companies in a scam worth Rs 31,000 crore.
Many borrower companies having the same addresses, directors, and auditors, the news portal had alleged.
PMC Bank Scam — Two Suicides and Countless Betrayed Account Holders
Mumbai-based PMC Bank is one of India’s top 10 Co-operative banks. It was in the headlines last year when the Reserve Bank of India issued instructions to the bank to restrict large withdrawals by its customers.
It led to large scale panic among PMC Bank customers. Many salaried individuals who had placed their life savings with the bank were left stranded.
Moreover, investigations showed massive unsecured loans fraudulently given to a single company ‘HDIL‘, which had defaulted on loan repayment to PMC of Rs 4,500 crores.
Investigations revealed PMC Bank began diverting funds to HDIL through 21,000 dummy accounts.
Furthermore, Joy Thomas, PMC’s MD, has admitted to large scale fraud and has been arrested along with former Director Surjit Singh Arora. Two directors of HDIL – Rakesh and Sarang Wadhawan also stand arrested. Further investigation revealed that HDIL are DHFL are linked.
Two PMC Bank customers died of heart attack and 1 committed suicide. The customers were stressed due to the RBI withdrawal limits imposed on the customers following a Rs 4355 crore scam.
Zomato’s Controversy — Food has no Religion
In July 2019, the customer cancelled his order only because it was assigned to a non-Hindu delivery boy. The person asked for a refund also which was denied by the company.
He then took to Twitter to share his agony with the world probably hoping for a sympathetic response. However, Zomato chose the wittiest way to answer. Zomato tweeted, “Food doesn’t have a religion. It is a religion”.
Food doesn’t have a religion. It is a religion. https://t.co/H8P5FlAw6y— Zomato India (@ZomatoIN) July 31, 2019
Zomato’s response surely left him looking for a stable ground. But it was the applaud that the response got from social media that left him surprised.