London Court Ruling Triggers Fresh Alarms Over Rs 3 Billion Silver Bank Crisis

The High Court in London has found Indian businessman Prateek Gupta liable for a massive nickel trading fraud, a ruling that has sent shockwaves through the financial sector and reignited concerns over the stability of Silver Bank.

Mr Gupta, along with companies under his control, was found to have orchestrated a fraudulent scheme and has been ordered to pay up to MUR 27.3 billion.

The judgement has cast a long shadow over Silver Bank, which has been under conservatorship since February 2024.

“Toxic Loans” and Financial Instability

The Financial Crimes Commission (FCC) is currently scrutinising a series of high-risk transactions conducted shortly after the bank obtained its operating licence in 2021.

Investigations reveal that between 2022 and 2023, seven companies linked to Mr Gupta secured substantial credit facilities.

These loans, ranging from MUR 157 million to MUR 200 million each, have been classified by investigators as “toxic loans” due to the extreme risk they posed to the institution’s financial health.

The Family Connection

While Silver Bank has consistently denied any direct involvement in Mr Gupta’s legal troubles, investigators are focusing on the bank’s ownership structure.

Mr Gupta’s wife, Ginni Gupta, is the principal shareholder, reportedly holding a 75% stake in the bank through a company registered in the Cayman Islands.

Public Funds at Risk

The controversy has reached the highest levels of government. The Prime Minister recently confirmed to Parliament that significant public assets were deposited into Silver Bank prior to it being placed under special administration.

The scale of the exposure includes:

• MUR 3.55 billion in total public investments.
• Funds sourced from state-linked organisations and institutions.
• Deposits made by several local municipalities.

Criminal Charges and Arrests

The FCC’s investigation has already led to criminal proceedings within the bank’s former leadership.

Chetan Singh Ramcharitar, a former Senior Relationship Manager, has been arrested and charged with money laundering in connection with the ongoing probe.

The authorities continue to work toward clarifying the precise nature of the relationship between Silver Bank and the entities controlled by Mr Gupta to determine ultimate responsibility for the failed funds.

Source: Defi Media