India, UAE banks too have large exposures to the troubled group
MUSCAT/January 22-2021: The huge bad loans left behind by the Oman’s troubled business conglomerate, Abou Nabil, LLC, the flagship company from the centenarian Darvesh Group, have literally put many of the leading Omani banks high and dry at a time when the Sultanate’s financial services industry is going through one of its toughest times in the recent history.
According to informed sources, the financial institutions’ exposure to this decades-old group led by Hassanmiya Suleman Darvesh, Talib Hassan Darvesh & Executive Director Faraz Jabbar is to the tune of a whopping 125 Omani riyals ($325 million) and the list of lenders includes the reputed lenders such as Bank of Baroda (BoB), Oman Arab Bank (OAB), Bank Muscat, National Bank of Oman (NBO), etc. A leading foreign bank is also said to be part of the list.
The more disquieting aspect is that the promoters are not present in the country and the group’s executive director Faraz Jabbar has been slapped with a travel ban in Oman. The lenders are at a loss as to how to recover the huge funds lent to the group as the promoters are not in the country and the executive director is yet to respond positively to lenders’ enquiries.
The group is said to have left non-performing loans (NPLs) to the tune of about AED1.5 billion with some leading banks in the UAE too.
Exposure to Indian banks
And more importantly, certain companies promoted by the same group in India have also enacted the same drama denting the balance sheets of some banks there too.
There were reports that Bank of Baroda (BoB), India, has already filed a fraud case against the promoters and its India- based company, Technovaa.
The companies from Oman that figure on the ‘blacklist’ include Abou Nabil LLC, Gulf Star LLC, Mega Muscat International and Technovaa LLC.
Talking to businessbenchmark.news, sources close to the developments said the group with operations spanning through India, UAE, Portugal, Oman, Italy, Mauritius, and South Africa had established credit lines with about 12 of Oman’s large banks.
Sources also blamed the promoters, who grossly mismanaged the running of the businesses, for the sad financial mess the group is currently into.
“More seriously, the assets have been overleveraged to suck excess funds from the banks in the past, especially in the last decade or so,” the sources explained.
Trade licences raise question
Though the group is popularly known as ‘Darvesh Group’ bearing the family name of the promoters including the chairman, Hassanmiya Suleman Darvesh, no trade licence has been registered in that name, and on the contrary, all units in the group are individual stand-alone entities.
There are a few Indian banks such as BoB, Union Bank of India (UBI) and Indian Overseas Bank (IOB) that have over the years built large exposure to the group, which has certainly added more woes to the already vulnerable banking system there.
Sources also added that apart from the bank loans, the company currently owes over 35 million Omani riyals to employees, various suppliers, and also to government and semi government entities.
