Why Subhash Chandra Has Become the New Poster Boy for Bank Loan Defaults

With due apologies to Shah Rukh Khan, if a biopic were ever to be made on Subhash Chandra – the Essel Group founder – it could well have one dialogue repeated over and over again – Subhash, naam to suna hoga (Subhash, you must have heard my name).

In the last few days Chandra has become the new poster boy for bank loan defaults in India, having taken over from Vijay Mallya – who perhaps grudgingly held on to the role for all these years. Mallya, I guess, must be feeling relieved.

In a world where social media sets the tone, Chandra was said to have settled bank loans worth ₹220 billion by agreeing to pay just ₹65 million.

Not surprisingly, people who comment on such things – that is, almost everybody on LinkedIn and X these days – were up in arms. 

Nonetheless, as it has turned out, the situation is a lot more complicated than social media warriors had thought.

It’s not the goal of this piece to explain how much Chandra actually owes to banks. But what I want to look at is something more fundamental: Why are some bank loan defaulters more likely to become poster boys than others?

If you were to ask the man on the street, before Chandra came along, who were the poster boys of India’s bank loan defaults, the most likely answers would be Vijay Mallya, Nirav Modi and Naresh Goyal of Jet Airways. (Modi defrauded banks.)

While these individuals were certainly responsible for defaults, there are bigger defaulters whose names people have never heard of. 

Take the case of Bhushan Steel. The company defaulted on ₹560 billion. Or Essar Steel, which defaulted on ₹490 billion.

Or consider other companies like Monnet Ispat and Energy, Bhushan Power and Steel, Era Infra Engineering, ABG Shipyard, Jaypee Infratech, Amtek Auto, Alok Industries, Jyoti Structures, Lanco Infratech and Electrosteel Steels, all big defaulters. 

Let’s take the case of Bhushan Steel, the big daddy of corporate defaulters. Its chairperson was Brij Bhushan Singal – almost no one outside the steel business or banking had heard of him. 

Bhushan Steel’s loan default was significantly higher than that of Mallya or Nirav Modi’s fraud. But Mallya was all over the media, whereas Singal was nowhere. 

Or take the case of the Ruia brothers (Shashi and Ravi), who ran Essar Steel. They were not as reclusive as Singal, but came nowhere close to becoming poster boys. 

Why did a few promoters become poster boys whereas the rest managed to continue almost without any scrutiny?

Identified Life
The answer lies in the concept of identified life versus statistical lives introduced by the economist Thomas Schelling.

Schelling explained this in his book Choice and Consequence: Perspectives of an Errant Economist: “Let a six-year-old girl with brown hair need thousands of dollars for an operation that will prolong her life until Christmas, and the post office will be swamped with nickels and dimes to save her. But let it be reported that without a sales tax the hospital facilities of Massachusetts (a state in the United States) will deteriorate and cause a barely perceptible increase in preventable deaths – not many will drop a tear or reach for their cheque books.” 

The sick girl who is dying is an identified life, whereas the people dying in hospitals are ‘merely’ statistical lives. We do not know who they are and, therefore, do not care about them.

This concept has been used in several public service ads as well. Mukesh Harane died of oral cancer in October 2009. He had been addicted to gutka, and after his death, he became the face of an anti-tobacco campaign. An audiovisual clip featuring him was shown regularly in cinema halls.

Indeed, the concept of identified life versus statistical lives explains why a few loan defaulters become poster boys while most don’t.

In Mallya’s case, it was his flamboyance that made him the poster boy – even before he chose to escape from India. The fact that he used his own brand to market his businesses ensured that he was pretty well known.

His sixtieth birthday celebrations, at the Kingfisher Villa located in the village of Candolim in Goa, were not very lavish in comparison to his past celebrations, but they did not go unnoticed. The Spanish singer Enrique Iglesias had been flown in for the occasion.

Raghuram Rajan, the then RBI Governor, without naming Mallya, said in January 2016: “If you flaunt your yacht, massive birthday bashes, etc, even while owing the system a lot of money... it seems to suggest that you don’t care.”

Nirav Modi was in the glamorous business of selling high-end diamonds. His designs were worn by celebrities. He also sold his speciality diamonds at well-known auction houses. The glamour he was associated with made for good copy and photographs.

Now, compare that to the promoters of Jyoti Structures or Era Infra Engineering, for that matter. Who wants to read about them? Where’s the story? Where’s the glamour? Were they ever seen at Page 3 parties? Or did they splash their friendship with film people?

In the same sense, Subhash Chandra is an identified life. He has been in the news as a media owner and also a Rajya Sabha member. In fact, even his unique hairstyle helped build his brand recall. 

Indeed, what hasn’t helped is the fact that Chandra has come out all guns blazing in trying to explain that he hasn’t defaulted on loans of ₹220 billion. This has brought more focus on him.

The irony is that by trying to push back against the allegations, he has drawn more attention to them. The Streisand Effect describes precisely this: an attempt to hide, suppress or rebut information can end up making it far more visible.

In Chandra’s case, the attempt to explain why he isn’t the poster boy for bank loan defaults may have inadvertently helped turn him into one. Also, this story, unlike the Zee TV soap operas, isn’t really simple enough that it can be explained to the average human mind.

The trouble is, many successful people, in their minds, have their own screenplay running – and in that screenplay, they are Salman Khan playing Ek Tha Tiger. The tiger can be shot, beaten and thrown into all sorts of trouble, but somehow, he always lives.

Tiger Zinda Hai isn't just a sequel; it's the plot running in the heads of those who dominate the screen long enough, whether guilty or otherwise.