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In truth such instances are fewer than in the past
‘We cannot have an affluent promoter and a sick company,’ warned the Finance Minister, P Chidambaram, speaking to media persons after a meeting with the heads of state-run banks in the capital on Monday. The reference, presumably, was to the Vijay Mallya owned Kingfisher Airlines.
Unfortunately, such veiled threats to corporate biggies are like water off a duck’s back! The fact is affluent promoters and sick companies have long been part of the coporate firmament in India. Speak to bankers, especially those in state-owned banks, and they will regale you with a long list of companies belonging to the Modis, the Ruias, the Essars, the MA Chidambaram group (SPIC), to mention just a few, that have been run to the ground by promoters and then nursed with taxpayer money. Kingfisher Airlines is only the most recent. The company was given kid-glove treatment by a consortium of banks, led by State Bank of India, before they finally called it a day.
Why do banks, that have no compunction in going after ordinary borrowers like you or I, turn Shrinking Violets when it comes to large corporate borrowers? The answer is simple: political clout of the corporates.
The silver lining is that, unlike in the past, such instances are less frequent than before thanks, in part, to media attention.The public furore seen over sops given to Kingfisher Airlines was noticeably absent in the past. And, hopefully, marks the beginning of the end of favoured treatment for a favoured few!.
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