Insolvency heat: Lanco encashes suppliers’ bank guarantees – Business Standard

The insolvency move of bankers has created a ripple effect in the industry with Lanco Infratech, one of the companies in the Reserve Bank of Indias list of 12, encashing bank guarantees of its suppliers. A similar predicament is being faced by steel companies whose suppliers and customers both have rushed panic messages to them.

Business Standard has reviewed letters written by Lanco to bankers of about half a dozen companies for encashing bank guarantees. Most of these suppliers like Pentair, Vaas, Intervalve, Kelvion and Emerson are not very big companies and the amount of bank guarantees is less than a crore. There may be a large number of suppliers. It appears Lanco is trying to take out whatever mone…

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