Darvesh group defaults on close to AED1.5 bn loans with scores of banks?

Promoters left the country about a year ago

DUBAI: Yet another Indians-managed big business group has failed in the UAE adding pain to its banking system.

The story of the 100-plus-year-old Darvesh Group, a well-diversified business conglomerate, spread over several countries, is doing rounds for contributing not less than AED1.5 billion to the bad-loan books of about 30 banks in the country.

Talking to businessbenchmark.news, sources close to the company as well as lenders said the group with operations spanning through India, UAE, Portugal, Oman, Italy, Mauritius, and South Africa had established credit lines with most of the UAE’s large banks including Bank of Baroda (BoB), First Abu Dhabi Bank (FAB), HSBC, National Bank of Fujairah (NBF), Standard Chartered Bank, etc.

Worse, the promoters of the financially embattled group including its chairman, Hassan Suleman Darvesh and his son, Taleb Hassan Darvesh, who had been running the show until recently, are untraceable in the UAE, according to a banker that has a sizeable exposure to the group.

Sources close to the group said the management has not only gone messy around the functioning, but more importantly, the assets have been overleveraged to avail excess funds in the past, especially in the last decade.

Though the group is popularly known as ‘Darvesh Group’ bearing the family name of the promoters including the chairman, Hassan 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.

Some of the group companies are Elegant Industries (in DIP but later moved to Dubai Industrial City) doing fit-outs and interior decoration; Mega Star (Dubai Industrial City), dealing in timber and general trading; Technovva (Kizad); Itos, dealing in plastic packaging manufacturing (Jebel Ali Free Zone), to name a few major ones.

The group has a few manufacturing units in Oman where Darvesh used to be a name to reckon with until two decades ago.

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 exposure to the group that boasts a glorious past.

BoB alone is said to be sitting on an exposure in excess of AED300 million, and this is said to be the largest funding to the group from a single bank. However, briefing on the lending to the group, a BoB top official said the exposure is much less than what is made out.

He also said BoB, which has lent to the group’s operations in India, South Africa, UAE and Oman, has already filed a case against Darvesh group to recover the loan amount a year ago.’

It’s also reliably learnt that most other banks have also filed or are planning to file case against the company. Informed sources said the group, which once had about 2000 employees on the rolls, saw the workforce dwindle to around 200 recently, and the operations have literally come to a standstill for want of funding.

If market is to be believed, until a year back or little more, the group had loans valued at AED1.3 billion from close to 30 banks.

Sources also added that apart from the bank loans, the company currently owes about half a billion dirhams to various suppliers, and also to government and semi government entities like DEWA, EPPCO, Etisalat, Dubai Investment Park (DIP), Dubai Industrial City, KIZAD etc.





Leave a Reply

Your email address will not be published. Required fields are marked *