Datawind CEO Suneet Singh Tuli in fresh controversy over unpaid loan taken from UP Financial Corporation

NEW DELHI/BANGALORE: After the recent controversy over the source of ultra low-cost Aakash tablet, Datawind CEO Suneet Singh Tuli has found himself embroiled in another controversy, this time over a 17-year-old unpaid loan.

Uttar Pradesh Financial Corporation has alleged that the Tuli family took a loan of 1.3 crore from it in 1995 but did not repay. The Tuli-family owned company has since closed down, forcing UPFC to seek the help of external affairs ministry officials in Canada to follow up with the promoters of Datawind.

In an emailed reply, Tuli admitted there is a dispute but said no money is owed by the Datawind Promoters to UPFC. "The principal was repaid, but there is an ongoing dispute regarding interest calculations and funds owed back by UPFC. The matter is pending in (Allahabad) High Court," said Tuli.

According to documents reviewed by ET, the loan was taken by Widecom Fax and Plotters, owned by the Tuli family, to set up a unit to make Widefax machines in India. Following failure to repay the loan, UPFC sold the company's physical assets for 50 lakh in 2005-'06, but was unable to recover a balance liability of about 1.04 crore as the promoters were by then shifted to Canada. "In this case, the promoters have not approached us for any settlement. We are yet to get our money back," said PR Suman, UPFC regional manager. UPFC then approached the High Commission in Ottawa seeking its help to collect the dues.

Following UPFC's request, vice-consul of the Canadian Consulate General of India approached the Tuli family based in Toronto. The Tulis have since then filed a case in Allahabad High Court disputing the amount demanded by UPFC.