Rajendra Sethia: the billionaire who survived ‘the world’s biggest bankruptcy’

And boy, was he rich.

Esal Commodities, which he set up in London in 1977, earned a profit of ₹1 crore in its first year through sugar, tea and shipping trades. By 1981 its turnover had grown to ₹100 crore. By then the slim, mustachioed Indian entrepreneur had built a business empire that stretched from Nigeria to New York.

His appetite for growth was insatiable. Acquiring banks, courting African strongmen, mastering commodities trading, every roll of the dice was bigger than the last. By the time he turned 30 he was already a pound billionaire. But unlike the handful of other Indian tycoons of the era he didn’t hide his wealth in mattresses, but put it out for all to see. Rolls Royces gleamed in his driveway while a Boeing 707, retrofitted with a bedroom, sauna and jacuzzi, always stood ready on the tarmac. At cocktail parties in Mayfair and Monte Carlo, he spoke the language of global finance with native fluency. His lavish spending was the envy of the world. His life up to that point would have given Harold Robbins ideas.

But like all great ascents, this one contained the seeds of its own destruction.

The great fall

Political coups in the corridors of Lagos and Khartoum saw alliances vaporised and assets frozen, leaving him with monumental debt. Bankers who once toasted him ordered audits. Creditors circled and eventually moved the courts to liquidate his flagship, Esal Commodities. It was dubbed the world's biggest bankruptcy at the time.

With Indian banks involved as well, the CBI got on his case and by March 1985, Sethia was behind bars. The charges were staggering: hundreds of millions allegedly siphoned from Indian banks through phantom trades and shell companies. The political undercurrents ran deep, with investigators pressing him to implicate senior politicians in exchange for leniency. He refused.

A decades-long legal battle ensued. Through it all, Sethia maintained his innocence while paying a devastating personal price. Two marriages fell apart before tragedy struck again: his third wife Sonia Sethia died in a car accident in Delhi in February 2012. Sethia himself suffered two heart attacks.

But even in his darkest moments, he exhibited a rare resilience. He adapted to prison life, meditated, turned to spirituality, and waited. When a Delhi court delivered its final verdict in July 2019, it was a damning indictment – not of Sethia, but of the prosecution. After 34 years, no credible evidence had been produced against him. His response was characteristically understated: no victory laps, just quiet acknowledgement that justice, though delayed, had finally been served.

The great suvivor

At a meeting some years ago, Sethia displayed neither anger nor regret as he looked back on his life. Sporting a red tikka, he slipped into the coffee shop of a five-star hotel, unannounced and unnoticed. The modest, mid-size SUV which took him there was a far cry from the luxury cars he was used to in his heyday. He spoke softly and moved slowly – telltale signs of the burden he's carried these past four decades. Perhaps he’d realised that the flamboyance of his youth may have been his undoing. In the India of the 1980s, wealth – barring that of a chosen few dynasties – was a dirty five-letter word.

Ever the raconteur, he related the strange experience of sharing a cell with Charles Sobhraj, the notorious serial killer. On 16 March 1986, Sobhraj executed his audacious escape with 11 other inmates. The authorities needed scapegoats. Sethia, already in their crosshairs, was charged with aiding the getaway – another case that would eventually be dismissed.

Today Sethia is a free man but the mystery around him remains. Is he a brilliant businessman brought low by a corrupt system, or a clever operator who finally met his match? A victim of political persecution or someone who flew too close to the sun? Were his trading practices genuinely fraudulent or simply too sophisticated for 1980s regulators?

The answer, like the man himself, remains tantalizingly elusive. In a world that prefers neat narratives and clearly defined protagonists, Rajendra Sethia refuses convenient categorisation. He remains an enigma, with a story too complex for simple moral judgments.