Amtek Auto: The inside story of how the auto parts maker got involved in the alleged fraud

Amtek Auto Ltd, once among India’s leading automotive component manufacturers, began as a rising auto-components manufacturer. It then embarked on an aggressive acquisition spree overseas (including UK), often financed via large borrowings rather than internal accruals. The debt mounted rapidly: one report notes borrowing rose from around Rs 3,800 crore to about Rs 14,200 crore within a few years, and eventually much more.

Amtek became synonymous with corporate distress when it landed in the Reserve Bank of India’s (RBI’s) “Dirty Dozen” list in 2017. This list named 12 large corporate defaulters that were to be pushed into insolvency proceedings under the newly implemented Insolvency and Bankruptcy Code (IBC). The inclusion of Amtek Auto reflected not just the company’s financial collapse but also the systemic failures of India’s banking and industrial lending practices. At its peak, Amtek Auto supplied components to major automobile manufacturers in multiple countries. But aggressive expansion through acquisitions—both domestic and overseas—led to mounting debt and over-leveraging. The company’s inability to integrate these acquisitions efficiently, coupled with a slowdown in the automobile sector, squeezed cash flows and eroded profitability. By 2016, Amtek’s consolidated debt had ballooned to over Rs 26,000 crore.

Despite multiple restructuring attempts and sale of non-core assets, Amtek failed to meet repayment obligations. It became a test case for the IBC framework. However, its resolution faced multiple hurdles—bidders backed out, valuations dropped sharply, and several legal disputes delayed recovery. Several bidders expressed interest in the first round of insolvency, but the most high-profile was the UK-based Liberty House Group, owned by the Gupta family. In 2018, Liberty was declared the successful bidder. However, the Guptas failed to make payments within the stipulated time, citing various reasons—including issues with due diligence, pending litigation, and delays in necessary approvals. Their non-compliance led to the plan’s collapse, pushing the lenders to seek termination of the resolution and approach the National Company Law Tribunal for a fresh round.

The second round of insolvency began in 2019–20. This time, the winning bid came from Deccan Value Investors, a U.S.-based fund, which agreed to acquire Amtek Auto and inject capital to revive operations. The NCLT approved the resolution plan in July 2020. However, the process again faced delays, this time due to pandemic-related disruptions and valuation challenges. Eventually, the transfer of control took place, but with limited revival prospects, given the deep operational and financial damage already done.  

The Amtek Auto case exposed significant gaps in India’s early insolvency processes — from inadequate bidder scrutiny to delays in execution. The failure of the Liberty House plan and the protracted litigation eroded value for creditors, reducing potential recoveries to a fraction of their claims.

Today, Amtek’s insolvency journey stands as one of the most complex and cautionary cases under IBC, underscoring how ambitious global bidders, procedural delays, and weak enforcement mechanisms can derail even high-profile bankruptcies.

Banks continued to extend credit, roll over obligations or restructure loans of entities like Amtek under lenient terms when, in fact, the business fundamentals were weak. Forbearance allowed the debt to build up without immediate recognition of distress. The “Dirty Dozen” firms were symptomatic of how forbearance allowed unviable firms to continue borrowing, masking the true extent of bad loans. Thus, the misuse: the company dipped into easier borrowings, banks delayed bad-loan recognition, and the problem grew rather than being tackled early.

A public interest litigation (PIL) was filed in the Supreme Court alleging large diversion of loans, creation of shell companies, siphoning of funds, and collusion with banks and officers. The PIL referred to forensic audit reports (eg by Ernst & Young) which indicated that the actual siphoned amount could be above Rs 20,000 crore. The court, in February 2024, directed the enforcement directorate (ED) to investigate and observed prima-facie that large-scale money laundering was possible given the web of 500+ companies, dummy directors, diversion of loan amounts into land/real estate, etc.

While Arvind Dham, the promoter of Amtek, is the central figure, evidence suggests several others were involved: bankers, auditors, resolution professionals, shell company directors, and stock-market operators. For instance, the ED’s supplementary complaint (August 2025) names promoters, key managerial personnel, auditors, bankers, resolution professionals, and market operators. Dummy directors, front companies and numerous entities point to a broader network rather than solo action. The scheme appears to have been organised, layered and supported by a broader ecosystem of actors, some of whom are under investigation.

Where the Case Stands

Arvind Dham is in custody. The ED arrested him and has opposed his bail in the Delhi High Court for a Rs 2,700 crore bank-fraud case. The Supreme Court in February 2024 directed the ED to investigate the matter comprehensively. Prosecution is ongoing under PMLA, large attachments executed, and investigations continue across multiple group entities. Insolvency and resolution processes remain unresolved: lenders still face large losses, and the fresh bidding process (after the SC directions) is at various stages.   

@MunishPandeyy