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After the big loan defaulter issues, the government is on a mission to prevent the loan defaulters to abscond the country. As per the report, the Centre is ready with a list of 91 directors and owners of firms categorised as wilful defaulters, and it is their target to prevent them from absconding from the country. Almost 31 of the accused economic offenders have escaped from India to safeguard themselves from prosecution and the collective amount they owe to Indian money-lenders and public institution sums up to around INR 40000 crore. The Union Cabinet on clearing the Fugitive Economic Offenders Bill, which allows the government to confiscate a defaulter’s assets without conviction and liquidate them.
The directors or owners of the Companies who have been identified as the wilful defaulter are around 400 in numbers, refused to pay loans despite they had means to repay.Moreover, government has asked Indian Banks to provide passport details of the guarantors of such defaulters, for soured credits of more than INR 500 million.
The report did not reveal much, but stated that some people may be barred from leaving the country if they are found to have committed fraud or engaged in wilful default.
The public showed anger towards the management of the government after Nirav Modi and Mehul Choksy successfully absconded the country just before the default became public.So the introduction of the Fugitive Economic Offender Bill aims to give authorities power to impound the assets of fugitive offenders.
The 31 alleged offenders who had already absconded from India included business tycoons like Vijaya Mallya, the name behind the best-selling beer in India, Nirav Modi, Ami Modi his wife and brother Neeshal Modi, accused of Punjab National Bank default, and Jatin Mehta, the name behind Winsome Diamonds.
As the national election is due next year, the government is under pressure to act against wealthy defaulters. Thus, India’s regulator is geared up to clean up $210 billion of bad loans, to some extent by strict implementation of bankruptcy rules.
Arpinder Singh, a partner at EY, responsible to oversee fraud investigation across India and emerging markets said that there is a lot of pressure on the industry at present; though the Finance Ministry Spokesman did not show any response regarding the steps taken by the government.
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