A Bone Chilling real life story where a Blossoming Business was shot down with catastropic failure by ill

advice for procurement of finance. A big wake up call. This is a true story This is with respect to a recent NPA project awarded to us recently. A particular firm from India (well known) had a clean (with no defaults) heafty balance sheet in a seeds business. Over the years, their business grew manifold bringing great prosperity all over. After a few years of successful operation, they decided to go for a small refinery so that they could make their own oil and grow their business. This is when the devil rang a bell. They approached a particular finance company to render them finance for their expansion. Without any caution, without any tentative terms, without any paperwork, without having done due diligence on the company, they mandated this finance company. Initially, the company did a sweet talk and gave them big assurances (all verbal) that their work would be done on most professional terms possible and that they would be given their requisite amount of loan within 90 days. They gleefully agreed without confirming the terms. The finance company did tough paperwork to ensure that they would be able to take advantage of these innocent souls. Initially this company had no resources and they outsourced it to a company. The new company first led them to a bank promising sanction. The bank approved the loan.They mortgaged all their land, property, assets into this loan. Now, the firm wanted an enhanced santion so this new finance company led them to an nbfc. This nbfc promised them sanction on the condition that they bring a 90 day letter from the bank saying that they no longer wished to avail their facility and would take over the loan (Again, no terms were given). The firm got this letter and the nbfc transferred and mortgaged all their assets. After mortgaging, the nbfc gave them the terms of a whopping interest rate of 36% per annum, exorbitant unheard of processing fees and equally inflated service charge (without any npa, defaults, profit balance sheet, worst in history). As a result of this, the companies finances, production, plant nose dived. They were unable to pay this 36%. On top of that the nbfc complused them to pay DAILY interest by 10 am everyday. This caused a catastrophic failure of the company. As they did not pay the interests, the company ran into an NPA, shutdown of their plant, employees removed, personal life destroyed, promoter suffered a stroke, all turned into a big zero. A perfectly well functioning completely sound company went into an NPA. We are now reviving this company and will use our length and breadth to salvage them. This is a living example of how important we are, how important the right advice and right resources are. Always be very very cautious when you select a finance company. nmistry@Rachcons.in