Atlas Jewellery India Ltd has called an urgent meeting of its board on Sunday amid reports that its chairman and majority-owner M.M. Ramachandran has been arrested in Dubai along with his daughter, after the company allegedly defaulted on loans worth Rs1,000 crore.
Atlas Jewellery, which operates jewellery stores in India and several Gulf countries, wrote to the BSE that it was neither aware of any information which has appeared in the media, nor received any communication from Ramachandran. The note added that the board has taken note of the information, and will review it and take necessary steps. The note, signed by the company secretary Chandan Mahapatra, said Atlas will, on its own, try to verify the truth of these reports.
On 31 August, Dubai-based Khaleej Times reported that the Dubai police had detained Ramachandran on 23 August. The same day, Reuters reported that Atlas had defaulted on loans worth about 500 million dirhams ($136.2 million or Rs1,000 crore), and quoted a Dubai police spokesman as saying that Ramachandran “was arrested and is in our custody”. The report said banks were considering various options, including legal action to retrieve the money. Reuters attributed the information to four banking and trade sources it did not name.
Since 23 August, when Ramachandran was reportedly arrested, Atlas Jewellery shares have lost more than half of their value. On Wednesday, they closed at Rs27.25 on the BSE, down 9.92% from its previous close.
The Reuters report said the non-payment by Atlas affects at least 15 banks, adding it was not clear why the company failed to honour its debts. According to a banker in the know, three Indian banks—South Indian Bank, State Bank of India and Bank of Baroda—are part of the 15 lenders.
According to the Atlas Jewellery website, it has over 50 establishments and a store in every major business market in the Gulf Co-operation Council.
Ramachandran, who hails from Thrissur district in Kerala, started his career with Canara Bank in 1963 before moving to State Bank of India. Later, he joined the Commercial Bank of Kuwait. In 1981, Ramachandran entered into the gold business by opening the first Atlas Jewellery showroom in Kuwait. He has also produced several Malayalam movies and even acted in some of them.
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