RBI Defaulters List: Cranes Software and Prag Bosimi respond

After the publication of our series on the Reserve Bank of India’s Wilful Defaulters and Defaulting Borrowers list, two of the companies we had contacted earlier have got back to us.

Prag Bosimi has said that they have not defaulted to the extent stated in the list. They have stated that their core project cost was Rs 328 crore and was discontinued in 2013 for reasons beyond the control of the management. They said the company is still operational, but no longer manufactures textiles. They have also stated that they have settled more than 80% of their liabilities and the rest is under settlement/payment.

Crane Software has also said that they owe Rs 649 crore to Indian banks and not Rs 3,580, which is the figure suggested by the list Newslaundry has accessed. They have offered to provide Newslaundry a “more authentic source of information” about its outstanding amounts with the banks. Cranes asserted that the company has been affected by the global economic slowdown of 2009, but has managed to settle its loans of as much as Rs 326.07 crore since then.

The discrepancy between the numbers we have and those offered by the company can possibly be attributed to recurring loan amounts and the contention that the entries on the RBI list are repeating, as it is the same debt that is carried over from one quarter to the next with interest added. However, that formula would be inconsistent for many other entries for other parties where the figure of default jumps to almost three to four times in a couple of quarters.

Which is the more accurate approach, only the RBI can confirm. Our questionnaire to them was sent on April 13.

Meanwhile, Business Standard has decided to publish “corrections” on behalf of Newslaundry’s report without getting in touch with us. The financial daily carried a detailed report on April 26 headlined Newslaundry reveals ‘RBI list of top 10 defaulters‘. The report borrows heavily from Newslaundry’s report on top 10 defaulters. On April 27, Business Standard published a correction stating that Prag Bosimi has been shut for three years and that it did not owe liabilities to the tune of Rs 3,558. Business Standard’s reporter did not consider it important to get in touch with Newslaundry. Neither did it deem it important to check the veracity of Vyas’s statement that Prag Bosimi has been shut for three years.

The authors can be contacted on Twitter @MnshaP and @garimachitkara