Mumbai, Jun 17: Yashovardhan Birla has been declared a wilful defaulter by Kolkata-based lender UCO Bank for non-repayment of Rs 67 crore by Birla Surya Limited – one of the companies in his group.
Notifying him as a wilful defaulter, the bank said the company had a credit limit of Rs 100 crore, of which Rs 67 crore plus interest was due. The loan was classified as a non-performing asset in 2013.
Once a promoter is classified as a wilful defaulter by a lender, his access to funding dries up not just for the existing business but for any company in which he is a director.
Birla Surya had availed of the loan for the purpose of manufacturing multi-crystalline solar photovoltaic cells.
Although the group has more than a dozen companies, including Zenith Steel, Birla Power, Birla Lifestyle and Shloka Infotech, most of the businesses are stressed and not in a position to repay creditors. The company faced fresh trouble last year when three group firms – Birla Cotsyn, Birla Shloka Edutech and Zenith Birla – came under investigation for diversion of funds. This followed complaints by fixed-deposit investors of not getting their money back.
Ironically, the Kolkata-based bank was founded by Yash Birla’s great-grand uncle, Ghanshyam Das Birla. GD Birla’s brother Rameshwar Das Birla was the grandfather of Ashok Birla, Yash Birla’s father. Yash Birla inherited the family business at the age of 23 after his parents died in an air crash in Bangalore. The group was run by advisers for several years. The group also runs several charities and several schools under Birla Shloka Edutech.