Sethia Makes His Next Move

The worlds biggest bankrupt sets up a new company and says he has paid back every penny. But the bankers laugh

Two months ago the once biggest bankrupt in the world made a formal but understated return to the world of business when he registered a company in Calcutta. This was his first venture since 1985, when he was arrested by the Central Bureau of Investigation on charges of forgery, and defrauding Indian banks. Theres more: he says all his creditors have been paid off, and the money he owed to the banks has been given back.

At the moment we are in the office of Rajendra Singh Sethias lawyer in the Thapar Chambers commercial complex in Ashram, Delhi. Sitting in the glass-walled cubicle, Sethia peers at the untidy clutter of files stacked on the table. In jeans, striped shirt, wraparound sunglasses and ponytail, he seems to have reluctantly strayed from a rock fest instead of being the $2 billion per year turnover businessman that he once was. He looks forty, moves with the energy and grace of thirty. Opposite him sits his lawyer, Yakesh Anand, (Anand & Associates, solicitors and advocates), taking in everything with the hooded eyes of a bird of prey. Raj and I, says Anand, have grown up together in matters related to criminal law, referring to the 12 years of constant litigation he has fought on behalf of his client.

F***, says Sethia, morosely flipping through a file. For the moment that stunning charm and dazzling smile seem to have deserted the former master trader of commodities.

Perhaps Anand has said the wrong thing. For, the growing up experience includes CBI inquiries, and the now aborted allegations of having masterminded the escape of international crook and murderer Charles Sobhraj, way back in 1987. In that time he has been in Tihar jail for two years ( the best health club resort in town, eh?) and fought through a tangled web of case and counter-cases, petition and counter- petition.

But the gloom doesnt persist for long. He wants to get back into the big league, but to do that he needs cash flows. Hey, he says, You cant expect me to start working for a few thousand a month now do you? The problem is, for doing big business I need to work with the banks.

There is a small problem, though. Sitting in the stark confines of the fourth floor office of a public sector bank in Mumbai, banker Rajiv Ranjan Tiwari (name changed), sums it up. He has a completely different perspective on Sethias past and future career. Mr Sethia, he says coldly, owes us much more than what he says, possibly even believes. Mr Sethia is grandstanding. Hes starting a new business, is he? After what he did to us no bank is going to give him any credit.

F***, explodes Rajendra Sethia. I dont owe the banks money, they owe me money!

Now hold on there, just a minute. When the CBI arrested Sethia in 1985, he stood accused of having looted Indian banks and his trade creditors of hundreds of million of dollars from his group headquarters in London. At the receiving end of his alleged duplicity were three of his Indian client banks, the Punjab National Bank, Central Bank of India and the Union Bank of India. So how can banks owe him any cash?

Its very logical, really, answers Sethia. You only have to apply your mind.

This is how he looks at it: there are only two chargesheets that have so far been filed against him. The one in 1985 when the CBI accused him of defrauding the Punjab National Bank of around $10 million, and the 1991 chargesheet that says he defrauded the Central Bank of India of around $2 million and 650,000. Both cases are pending in court.

In fact, it is a matter of record that Sethia has only the two cases lodged against him in the past twelve years. The Union Bank chargesheet is yet to be filed and, therefore, the total outstanding liabilities against him stand at around $14 million as of date.

And that has already been paid! says Sethia, throwing his winning card with a winning smile. Okay, leave aside the fact for a moment that I am accused of having cheated the banks, while you sit absolutely riveted watching his expansive arms movements. When they pressed me into bankruptcy, my assets were liquidated, right ? That got them, what, $20-25 million? There are papers to prove it. CBI says I owe the banks around $14 million. So wheres the case?

For the BSc Economics student from London University, economics always came easily. Given what I have learnt over the years, I have almost no respect for anyone who says he is an economist. Its a subject that leaves too much scope for creativity.

So does consulting, according to some. For, Sethia intends his new company, RASP Consultants, to offer consultancy services to anyone interested in trading abroad, especially in the African countries Sethia once specialised in. I still have contacts there, he says, look, people come to me asking for advice, so its not difficult to put a few deals together. My name is one of my biggest assets and my biggest liability.

Of course, Sethias creditor bankers have a completely different take on the subject of payment. Says Ramesh Mishra (name changed), Mr Sethia says he has paid us fully. Well, he is entitled to his views. But he is wrong. According to Mishra, the three banks were Sethias creditors for around $50 million. The $10 million Sethia speaks of was just a single out of the many deals PNB had with him. And, states Mishra, In all these years he has not paid anything willingly. He has fought us for the money we were entitled to in the first place, through counter litigations.

Mr Raj Sethia is not a gentleman, says Tiwari.

Im a gambler, says Sethia, that high voltage smile back on again. I live by my wits. But more seriously, if the banks think I owe them money, then why, in all these years, has not one of them sued me? Its a question to which no one seems to have any convincing answers .

How can we sue a client? says Tiwari. Bad for business. And the banks are government owned as is the CBI. So what difference does it make if we or the CBI has filed the case?

At the moment, though, he claims to have very little money left anyway. Theres a little bit of family property in Calcutta that keeps me going, he says. But what about the cellphone, the chauffeur-driven Contessa, the permanent residency in Delhis five star Taj Mahal hotel for which the tariff is Rupees Ten Thousand Five Hundred per day? Being a bankrupt may not be all that bad. Oh, even a dead elephant is worth a few lakh, he replies airily. And my wife, Aruna, has a business in California that pays for my bills. So what is the name of her company? I dont know, says Sethia.

If the law takes its ponderous course, Raj Sethia may be a very old man before he is set free or imprisoned, depending on what the law decides. But Sethia is a man in a hurry. I want justice now, he says, exonerate me or hang me, but do it quickly.

In the meanwhile he shuttles between the four metros (I have to report to the CBI office every week) trying to make something of it all. At no time does he forget the ironies that have dominated his life. I was the only one in my family to take Indian citizenship, the only one to believe in India. And now look what has happened. I was a leading businessman then. Now Im named a bankrupt and fraud. Apart from his family, settled abroad, he misses the good old days when he was a major international commodities trader. There is no honesty and integrity left these days, he says sadly.