Jhunjhunwala brothers led Rei Agro to hit banks with Rs 10,800 cr jolt

Financial institutions, including foreign banks, are set to take a hit of Rs 10,800 crore from country’s erstwhile largest basmati rice exporter Rei Agro, which has gone down due to alleged frauds committed by promoters. As per creditors’ claim list finalised on Monday, Indian banks alone have run up dues of Rs 8,536.87 crore, which are much higher than previous estimates of Rs 5,300 crore.

The biggest hit lenders are UCO Bank, J&K Bank and SBI with each having exposure of more than Rs 1,000 crore. UCO Bank tops the list of claimants against Rei Agro with Rs 1,207.11 crore followed by State Bank of India (Rs 1,079 crore), Jammu & Kashmir Bank (Rs 1,011.67 crore) while those having substantial claims of unpaid loan are Corporation Bank (Rs 8,86.89 crore), Indian Overseas Bank (Rs 638.10 crore), Bank of Baroda (Rs 535.67 crore) United Bank of India (Rs 426.38 crore) and Life Insurance Corp (Rs 404.38 crore).

The resolution professional, however, has refused to accept all SBI’s claims, and has brought them down to Rs 969.51 crore.

There are 23 major Indian creditors, including 18 Indian banks and others like LIC, IFCI, Pegasus ARC and Reliance ARC.

Foreign financial institutions are all unsecured creditors with almost no chance of getting recovering money as Rei Agro has entered liquidation after all attempts to get buyers have failed.

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Foreign creditors include Bank of New York Mellon with dues of Rs 810.62 crore, Credit Suisse (Rs 694.86 crore), Noor Bank (Rs 403.50 crore), Bank of East Asia (Rs 80.68 crore) UBS (Rs 119.19 crore) and Mashreq Bank of Dubai (Rs 155.43 crore), which had earlier tried to initiate winding up petition against Kolkata-registered Rei Agro promoted by the Jhunjhunwala brothers from New Delhi.

The Enforcement Directorate in January arrested managing director Sandip Jhunjhunwala for alleged money laundering and defrauding banks.

It had attached assets worth over Rs 100 crore of a basmati rice processing firm in connection with an alleged bank fraud case.

The law enforcement agency, in 2016, had registered a money laundering case against the company.

By Sumit Moitra, DNA Money