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When journalist Tamal Bandopadhyaya tweeted a notice regarding a loan from three major banks – IDBI Bank, HDFC Bank and Bank of Baroda (BoB) – to Great Indian Nautanki Company, the loan being guaranteed by Great Indian Tamasha Company, I thought it was a joke.
It was; but the joke was on us, investors and customers, because it shows how lightly banks take their fiduciary responsibility to control the companies they lend our money to. Together they are trying to recoup at least Rs150 crore. The names alone caused enough outrage that the tweet went viral on Twitter. Here’s what its about.
IDBI Bank Ltd has posted an announcement for an online auction of a property to recoup nearly Rs 93 crore loaned to Great Indian Nautanki Company Pvt Ltd (Great Nautanki) effective May 1, 2022.
He planned to do so by selling the property of his surety company, Great Indian Tamasha Company Pvt Ltd (Great Tamasha), a Delhi-based company incorporated in January 2008 which is dedicated to “sports and recreational” work.
Great Nautanki, incorporated in September 2007, is a subsidiary of Wizcraft International Entertainment Pvt Ltd (Wizcraft) and operates an extensive outdoor live event venue called Kingdom of Dreams spread over six acres of land in Gurugram. Another one media report says it’s owned by Wizcraft International Entertainment and the Apra Group.
Great Nautanki also owes at least Rs6.25 crore to HDFC Bank (according to a December 2015 notice) and Rs49.23 crore to BoB (according to a February 2015 notice).
Furthermore, Zaubacorp.com shows significantly higher charges and borrowings from the same three banks under Great Tamasha (Rs22.5 crore to HDFC Bank, Rs50 crore to IDBI Bank and Rs47 crore to BoB) which is the guarantor. Thus, the total amount owed to these banks by the three companies is currently unknown.
We also do not know if the three banks have lent to other companies at the same address in Delhi. Most have at least one common Anumod Sharma or Nilima Sharma, and in most cases, Sanjay Choudhry. Most of these companies were created between 2008 and 2013.
For example, Great Indian Craftsman Hospitality Pvt Ltd, established in 2012, is active in hotels, campsites and hospitality and has Anumod Sharma and Sanjay Choudhry as directors. But a very similar sounding Great Indian Hospitality Pvt Ltd, with Anumod Sharma and Gajinder Singh Bhogal as directors, was already established in 2008 for exactly the same activities and shows. www.kingdomofdreams.co.in than its website.
Great Coating Solutions Pvt Ltd, established in 2013 with Anumod Sharma and Gajinder Bhogal as directors, also has the same address. SG Investments Pvt Ltd, incorporated in 2008, has Anumod Sharma and Nilima Sharma as directors and is in what is described as ‘business ancillary to financial intermediation’. International Institute of Media and Entertainment Pvt Ltd, with the same [email protected] email and Anumod Sharma and Sanjay Choudhry as directors, was incorporated in 2011.
Then there are the three Apra companies – Apra Auto (India) Pvt Ltd (this dates back to 1999 and is in the auto accessories business with Anumod Sharma and Sanjay Choudhry as directors); Apra Craft Traditions India Pvt Ltd (established in 2008, is a commission agent, auctioneer and commodity broker which has Neelima Sharma and Archana Saxena as directors); Apra Realty & Infra Pvt Ltd (involved in the buying and selling of real estate and was established in 2012; it has Anumod Sharma and Sanjay Choudhry as directors).
Why is all this important? Because it is clear from the publicity of IDBI Bank that these companies guaranteed each other to raise bank funds. The advertisement lists Anumod Sharma, Dr. Anu Appaiah, Viraf Sarkari, Sanjay Chaudhry, SG Investments and Wizcraft as other guarantors, except Great Tamasha and Wizcraft.
While all the action takes place in Delhi, Great Tamasha’s property (plots totaling 107 acres) up for auction is in Madikeri taluka in the Kodagu district of Karnataka for a reserve price of a mere Rs11.53 crore. Some sources suggest the reserve price is shockingly low; but that’s another Pandora’s box that isn’t the subject of this column.
The key company here that made Tamasha and Nautanki bankable is Wizcraft. It was once a high-flying company that hosted live events for global celebrities and big award shows for sporting events and the film industry. He clearly came out of Great Tamasha to create a live entertainment destination in Gurugram called ‘Kingdom of Dreams’ which has its own wiki page and was apparently a ‘happening destination’ until the pandemic disrupted its business.
In May 2021, IDBI Bank’s bankruptcy proceedings against Wizcraft were admitted by the National Company Law Tribunal (NCLT). IDBI Bank claimed that Wizcraft had issued an “unconditional and unrecoverable (sic)” guarantee of Rs 60 crore on behalf of Great Nautanki, the original and defaulting borrower. Wizcraft was unsuccessful in its attempt to deny liability, which was continuous until the full loan with interest, fees, charges, etc. be paid. Contrary to the false narrative peddled on social media to defend Great Nautanki and Wizcraft, the default values started in 2014 and it was classified as a non-performing asset, long before any damage by COVID.
Asked by MoneylifeIDBI’s chief managing director, Saumya Chaudhuri, in an email response, wrote that Great Nautanki “was in business until Covid restrictions were imposed in March 2020 and its loan decision in 2009 was based on “an appropriate assessment of the Borrower’s operations”.
At the same time, he says, “Quick recovery actions were initiated by IDBI Bank against the borrower in 2014 itself by recalling the loans / invoking the guarantees and initiating SARFAESI action against the property of the borrower. ‘borrower”. Does this mean that Great Nautanki was operational until COVID, but suffered huge losses in less than five years after borrowing funds?
According to IDBI Bank, “rigorous recovery actions” have been taken against Wizcraft and it sees “additional scope for substantial recovery through SARFAESI auctions and corporate guarantees etc.” With a low reserve price even then, it remains to be seen whether a substantial recovery would be realized. Even though Wizcraft had a revenue of Rs327 crore and a net worth of Rs46 crore in 2018-19, it would also have been impacted by the COVID pandemic. Moreover, he has loans from several banks other than these three.
Mr Chaudhuri argues that IDBI Bank has never been Great Nautanki’s largest lender and that the outstanding amounts of other banks shown in the advertisement have different dates. We already know that BOB and HDFC Bank have loaned this group far more than what is advertised, which would only make a “substantial recovery” more difficult.
IDBI says this loan “has been managed in accordance with normal lending standards after reviewing viability with other banks in the normal course of business”, but has it bothered to review the clutch of new companies that were incorporated by the promoters in the same five years when the Grand Nautanki became loss-making? How were they funded? I’m sure some research will yield uncomfortable answers.
Remember, IDBI Bank itself was bailed out by the government, with public funds from the treasury as well as Life Insurance Corporation of India Ltd (LIC), to keep it afloat. The latter, as a listed entity, has recently changed from a servant of the government to one that owes its primary responsibility to investors.
How crucial is a name?
Now let’s see why ridiculous and pejorative names like “Great Tamasha” and “Great Nautanki” should have raised a red flag with lenders.
Every book on marketing, branding, and entrepreneurship emphasizes the “monumental role” of a business name in brand perception. It’s not just the first point of reference with customers (and hopefully lenders), but entire relationships are built around the way it presents itself. So a deliberately frivolous and pejorative choice suggests a kind of flippancy that should have been a red flag, especially for traditional, stuffy bankers. After all, these are not angel investors willing to bet on a risky business with great potential.
Either way, Great Tamasha and Great Nautanki basically run events at a specific destination, like an amusement park or another Disneyland. It might have worked if all skill sets, rights and talents were held and concentrated in a single company, instead of being distributed among several entities incorporated in quick succession with the same address.
Bankers are supposed to be rule-bound, boring, numbers-obsessed people with a heavy fiduciary responsibility to make correct lending decisions. If they had, they would have avoided the Tamasha drag a guarantor into bankruptcy proceedings and the nautanki to have multiple guarantors for a high-risk entertainment company known for its payment problems.