There have been many cases where leading industrialists had been termed as defaulters by some leading banks. Recently, AC Muthiah, co-promoter and former Chairman of First Leasing Company of India has been declared a ‘wilful defaulter’ by IDBI Bank after First Leasing failed to make a payment of Rs 508.40 crore. The bank declared the same in a public notice, stating that Muthiah and Farouk Irani, promoter director of First Leasing are in default of Rs 508.40 crore as of August 27 and that the bank is following the ‘due process of law’.

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First Leasing has been under the scanner of various law enforcement agencies such as the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI), which are investigating fund diversions by the company. The company, co-promoted by the former BCCI (Board of Control for Cricket in India) Chairman and Farouk Irani, undertook to lease assets. In June 2018, the CBI filed a charge sheet against Muthiah for allegedly cheating Syndicate Bank for a sum of Rs 102.87 crore.

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The company was allegedly showing inflated income and assets since 1998 and that Muthiah and Irani along with seven shell companies had allegedly cheated Syndicate Bank by submitting forged financial statements to be eligible and receive high credit limits. The duo allegedly then siphoned off these funds, causing the bank a loss of around Rs 102.87 crore. Both Muthiah and Irani were charged with criminal conspiracy, cheating, forgery and destruction of evidence.

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