Thread by @blueringtail

Here's a recap of how Punit Goenka of the Subhash Chandra family (allegedly) defrauded and stole from Punjab National Bank. One of the reasons for Sony to call off its merger with Zee.

This is a story of of how a company can abuse existing financial systems to get its way 🧵

Here’s a fun way to steal money from a bank:

1. Borrow money. Tell the bank that you need it for your company’s operations

2. Don’t use it for your company’s operations. Instead, lend this money to some other companies (that you secretly own)

3. Shut those companies down. The bank goes to your original company for its money but you put your hands up and point to these other companies which don’t exist anymore

4. ??? Profit

This is exactly what Shirpur Gold Refinery did, a company owned by the Subhash Chandra family.

Shirpur Gold Refinery borrowed ₹404 crore from Punjab National Bank.

It then lent this money to a number of companies, the largest chunk of which went to a company called Altrarex which borrowed ₹241 crore.

Of course, Subhash Chandra & family owned all the companies here—Shirpur, Altrarex and whoever else Shirpur lent to.

I want to emphasise: Shirpur borrowed from PNB and lent money to Altarex, another company owned by Subhash Chandra.

Once Altrarex had this money, the problem then became how does one shut this company down so that it doesn’t have to be returned to Shirpur, and well, Punjab National Bank?

The way most companies die is by taking loans which they’re unable to repay.

Someone lends money to a company and expects regular payments back with interest.

If the company doesn’t repay on time, the creditor gets annoyed and takes it to court.

The court then sells off everything the company has and repays the creditor with whatever it can recover.
Classic.

Altrarex borrowed money from Shirpur, yes, but it also borrowed money from a company called Ekmart.

A relatively small amount, about ₹49 crore. Ekmart was also owned by Subhash Chandra & family too!

We now have three companies owned by SC & fam -- Shirpur, Altarex, Ekmart.

Altrarex borrowed money from Ekmart and didn’t pay it back. So Ekmart took Altrarex to the NCLT, to force it to pay it back its money.

A Subash Chandra company took another Subhash Chandra company to the court to force it to pay back money! Bizarre?

Once Ekmart took Altrarex to the NCLT, this is what a normal day would look like:

1. Ekmart goes to the NCLT and tells the court that Altrarex owes it ₹49 crore but isn’t paying it back

2. There is a public announcement! All creditors of Altrarex are invited to come and ask for their money back

3. Eventually all creditors THAT SHOW UP get something

Shirpur didn’t show up.

Ekmart (which had lent a small amount) took Altrarex to the NCLT, but Shirpur (which had lent a large amount) didn’t claim its money back when it had the chance.

So Ekmart would get its ₹49 crore back but Shirpur would get none of its ₹241 crore.

That cash would remain with Altrarex’s owners (Subhash Chandra & family) and the company would not exist any more.

And there you have it. That's how Zee's promoters stole money from lenders and SEBI caught on.

Here's my post from May 2023 that goes into the finer details: boringmoney.in/p/zee-merge-wi…

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