Rajasthan’s Jaisalmer police have arrested ex-State Bank of India (SBI) chairman Pratip Chaudhuri in relation to a loan scam case involving a hotel in Jaisalmer, The Times of India reported.
Chaudhuri was arrested from his Delhi residence in the case which is related to properties owned by Godawan Group which took Rs 24 crore loan from SBI in 2008 to construct a hotel, it said.
Alok Dhir, who owns 27% stake in Alchemist Asset Reconstruction Company (ARC) Pvt Ltd, has managed to flee, the report mentioned.
An arrest warrant was issued by the Chief Judicial Magistrate court in Jaisalmer against Pratip Chaudhuri, Alok Dhir, RK Kapur, SV Venkatakrishnan, Sasi Methadil, Devendra Jain, Tarun and Vijay Kishore Saxena.
The Dhir family is the sponsor of Alchemist ARC, which is backed by DMI Finance, a non-banking financial company.
After the development, SBI said, Garh Rajwada’ was a hotel project in Jaisalmer, financed by SBI in 2007. The project remained incomplete for over three years and the key promoter passed away in April 2010. The account slipped into NPA in June 2010.
The case against the alleged names is related to properties owned by Godawan Group where its properties worth Rs 200 crore were sold for Rs 24 crore after they were seized by the bank against non-repayment of loan.
An arrest warrant was issued by the Chief Judicial Magistrate court in Jaisalmer against Pratip Choudhary, Alok Dhir, RK Kapur, SV Venkatakrishnan, Sasi Methadil, Devendra Jain, Tarun and Vijay Kishore Saxena. Choudhary will be brought to Jaisalmer on Monday.
Time and again, the banking community and the Indian Banks’ Association (IBA) have condemned the spate of chargesheets and arrests of bank chiefs and senior bank officials by investigative agencies for sanctioning of loans and taking a commercial decision on loans turned non-performing assets (NPAs).
Chaudhuri will be brought to Jaisalmer on Monday.
The case is related to properties owned by Godawan Group where its properties worth Rs 200 crore were sold for Rs 24 crore after they were seized by the bank against non-repayment of loan.
Quoting the police, the report said, Godawan Group's Hotel Gaudavan Pvt. Ltd (HGPL) had taken a loan of Rs 24 crore from SBI Jaipur for construction of a hotel in 2008 and later defaulted. That time, another hotel of the group was functioning. Later, when the group was unable to repay the loan, the bank, considering it as NPA, seized both the hotels.
Chaudhuri was heading SBI as chairman then. However, SBI stated that Chaudhuri had retired from the Bank’s service in September 2013 itself and and joined the Board of Alchemist ARC in October 2014. Meanwhile, the loan were assigned to the ARC in March 2014.
This was contested by the Godawan Group in court which was later quashed by the Supreme Court, according to Alchemist ARC.
However, Alchemist ARC, in a note, said that the ARC took possession of the assets of (HGPL) i.e. Hotel Fort Rajwada Jaisalmer and Garh Rajwada, Jaisalmer under Section 13(4) of the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act)."
SBI said in a statement that, "Various steps taken by the Bank for completion of the project as well as recovery of Bank’s dues didn’t yield desired results. Hence as part of Bank’s recovery efforts, the dues were assigned to an ARC for recovery in March 2014. This sale to ARC by the Bank was done through a laid down process as per the policy of the Bank. We further understand that the borrower was subjected to IBC process (in December, 2016) by the said ARC and the asset has been acquired by an NBFC in Dec. 2017, again through due process under the orders of NCLT, Delhi," SBI said in the statement.
The borrower had initially filed an FIR with the Rajasthan State Police against the sale of asset to ARC. Later it also challenged the insolvency petition by Alchemist ARC.
In 2019, a higher insolvency tribunal and the Supreme Court had dismissed the challenge.
It appears from the copies of the proceedings now accessed by us that there have been some factual inaccuracies in the complainant’s version submitted to the Hon’ble court. In as much as SBI was not a party to this case, there was no occasion for the views of SBI being heard as part of this proceedings. SBI would like to reiterate that all due process were followed while making the said sale to ARC. The Bank has already offered its cooperation to the Law Enforcement and Judicial authorities and will provide further information, if any that may be called for from their side," SBI further said.
In September, VCCircle had reported that the ARC planned to launch its maiden alternative investment fund (AIF) to raise around Rs 200 crore (approximately $27.4 million) in two series.
In 2016, Alchemist ARC took over the hotels and a year later during the assessment of the property it was found that the market price was Rs 160 crore. After retirement, Chaudhuri joined Alchemist ARC company as a director. At present the cost of the properties is evaluated to Rs 200 crore, the report said.
Alchemist ARC is actively eyeing distressed assets within and outside of bankruptcy process.
A few years ago, the ARC had acquired debt worth around Rs 270 crore of publicly-listed Magnum Ventures, a paper company that owns a 216-room five-star hotel property located at Ghaziabad in Uttar Pradesh. It is operated by the Radisson Hotel group under its Country Inn & Suites brand. The hotel was restructured and performing before the pandemic and is now again will require restructuring.
In 2017, Abhijeet Group’s subsidiary Abhijeet MADC Nagpur Energy Pvt. Ltd was admitted for insolvency process by Alchemist ARC, which also holds its debt of over Rs 1,370 crore (around $178 million).
Besides, it also holds debt in two other hospitality assets, a sugar unit, textile, and iron and steel firms among large debt acquisitions.