Businessman flees with Rs 100m bank loan

Dec-13th-2011
BIRGUNJ,;-Birgunj-based Indian businessman Pawan Lohia has fled after taking a loan from a bank exceeding the value of the collateral.

“Lohia, owner of Pawan Putra Industries located in the Bara-Parsa Industrial Corridor, had borrowed Rs 100 million from Sunrise Bank after putting up his factory as security,” said a bank official who didn’t want to be named. “The loan was approved by the main branch.”

Sunrise Bank had published an auction notice four months ago, but it has not happened. The bank has quoted a minimum bidding price of Rs 95 million, according to a bank employee. “We have received about five bids,” he said. “Since all the applicants quoted less than Rs 95 million, the auction has not happened.”

Three years ago, Lohia had asked for a loan from the Birgunj branch of another commercial bank, according to a bank official. “As he wanted more money than the collateral was worth, we did not issue the loan,” said the official.

According to a senior member of the FNCCI Birgunj, Lohia, a resident of Rajasthan, India, has taken money to the tune of millions from local businessmen too. “He owes Rs 1.2 million to a couple of petrol pumps in Birgunj,” he said. Local entrepreneurs said that he has taken loans from at least a dozen businessmen in Birgunj.

“We lent him the money as we had known him for five to six years and trusted him,” said a businessperson from Adarshanagar, “Now we have lost millions because of that trust.”

Lohia had obtained Nepali citizenship from Parsa under the Citizenship Bill enacted after the democracy movement of 2006.

After his factory which manufactures mineral water, plastic products, betel nuts and gutkha closed in mid-July, 115 workers have been out of a job.

“There was no problem regarding production and demand in the market,” said Ram Surat Roy, a worker at the factory. “The factory was locked all of a sudden.