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NRI businessman absconds after defaulting on loans

Our Correspondent in Abu Dhabi

A Sharjah-based Indian businessman has been on the run after defaulting on loans and credit to the tune of over 479 million dirham ($ 130 million) involving 13 banks, including four based in the UAE, and leaving in the lurch hundreds of employees.

Madhav Bhagubhai Patel, who was first "camping" in London for a couple of months after the scandal broke out, is now reportedly in Brazil. After initially protesting his innocence and insisting that he would be back soon, Patel became difficult to locate.

The scandal was front-page news in many local newspapers, especially after the UAE central bank issued a categorical statement: "The Patel Group has been exposed to losses and the Indian partner has fled the country."

The statement was issued on May 3, 1999, and Patel told a local English newspaper, Gulf News, on the phone from London that the talk of his having fled the country was "unfortunate and grossly exaggerated".

He said he expected to be back by May 8. But he hasn't returned home to date.

Patel had admitted that his Sharjah-based aluminium smelting operation had run into some problems due to a pile-up of problems, including low metal prices worldwide and a couple of customer defaults in Europe, but he stressed that the overall operation was still sound.

Protesting his innocence, Patel said he would be meeting the group of bank creditors in London and that "many banks had indicated they would be willing to reschedule the loans".

But banking sector sources claimed that after initially indicating his willingness to renegotiate the credit, Patel could not be subsequently contacted.

The sources also claimed that the UAE government got the authorities in the United Kingdom to impound Patel's British passport. But Patel managed to have it released before vanishing again.

Incidentally, the Hamco Group in India, of which Patel's father B M Patel is chairman, also ran into a "series of difficulties" around the same time. But Patel denied that he had any link with the problem "back home in India".

Meanwhile, Paul Thottan, financial controller of the Patel Group -- which consists of Solo Industries, Zeeba Metals and SUminco Metal Trading Establishment -- consumed poison at his home at Palarivottam in Kochi, Kerala, on July 31. He died the next day.

Thottan, 46, had left for India on April 23, shortly after Patel had left the UAE and the scandal broke out.

According to sources, Thottan had signed papers for securing loans and credit from banks and financial institutions.

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