By Ifham Nizam

The Reserve Bank of India (RBI) in 2017 shocked the nation by disclosing a list of the country’s 12 largest defaulters, who were responsible for nearly a quarter of all bad loans in the Indian banking system.

This alarming discovery of the “Dirty Dozen” exposed the murky landscape of corporate irresponsibility and regulatory neglect, revealing the harsh reality of gross economic disparity, complacent governance and coordinated deceit.

For the first time, these defaulters risked losing control of the companies they had built. The Insolvency and Bankruptcy Code (IBC), the most significant reform in the financial sector under the Narendra Modi government, ensured the protection of these assets’ economic value, even as promoters were removed and replaced by stronger players with the vision and means to turn around these companies.

In ‘The Dirty Dozen’, business journalist N. Sundaresha Subramanian investigates the causes and impacts of India’s chronic bad loan crisis. By documenting in his book the economic misadventures of Vijay Mallya, Nirav Modi, and Manoj Gaur among others, Subramanian uncovers the intricate web of financial chaos, political plundering and malpractice plaguing the country’s corporate landscape.

Through his work, Subramanian offers a revealing diagnosis of India’s financial health since liberalization. In a country where millions struggle for basic sustenance, ‘The Dirty Dozen’ provides a brave, hard-hitting and much-needed exposé of crooked business moguls who orchestrated deeply damaging financial manoeuvres. Despite accumulating vast wealth, these individuals enjoy impunity, leaving India’s economy on the brink.

Currently the Executive Editor at Economic Times’ ET Prime, Subramanian began his journalism career with the launch of the Mumbai edition of Hindustan Times in the early 2000s. He has since worked at The Economic Times, DNA Money, Mint, and Business Standard.

Speaking exclusively to The Island Financial Review, Subramanian emphasized that democracy is a great strength for Sri Lanka and expressed hope that citizens would exercise their franchise wisely to elect a government capable of leading the nation towards economic strength and prosperity.

He remarked: “Sri Lanka is a beautiful country, which I had the privilege of visiting a few years ago. The sun-kissed beaches, the greenery of the highlands, and its rich cultural heritage make it a prime destination for global tourists. The new government should focus on further leveraging the tourism sector and developing trade and investments with friendly countries like India and the wider world.”

When asked about the effectiveness of the IBC, Subramanian described it as the most significant financial sector reform under the Modi government. For the first time, promoters faced the threat of losing control of their companies, which were often regarded as family properties passed down from one generation to the next. According to regulatory figures, over INR 3.4 lakh crore has been recovered by creditors, with more than 27,000 cases withdrawn due to the fear of losing companies, leading to settlements worth over INR 10 lakh crore. This, he noted, has contributed significantly to the improved health of India’s banking system.

Reflecting on his research, Subramanian shared that each of the twelve cases was unique. The troubled steel sector, accounting for five of the dozen, played a significant role in the narrative. The cyclical issues affecting steel demand, coupled with the cancellation of coal block allocations due to corruption allegations, were crucial to the story. Additionally, the different personalities behind each of these cases made them all the more intriguing, and Subramanian sought to bring out these complexities in the book.

Since its release, The Dirty Dozen has garnered significant attention and critical acclaim in major publications. Subramanian believes the book has greatly contributed to public understanding of the bad loan crisis and helped advance the discourse on the subject. Prior to its publication, there was no single source that compiled the details of these twelve critical cases. Various professional institutions, regulators, and students have shown interest in studying these cases, which could lead to a better approach if similar problems arise in the future.

Subramanian acknowledges that the introduction and effective implementation of the IBC over the past eight years has changed the equation between creditors and large debtors. With over 7,800 companies admitted to the resolution process, a significant amount of debt has been recovered, and over 1,000 companies have found new life. While the future remains uncertain, Subramanian hopes this new equation will result in a healthier financial system.

For those aspiring to cover complex financial issues, Subramanian advises practising reading financial statements and corporate disclosures. “It can often feel like searching for a needle in a haystack, but if you look hard enough, you will eventually find it,” he says. Since those involved are usually resourceful individuals, he stresses the importance of not only finding something to write about but also being able to defend it.