Two independent directors of Mumbai Hyatt Regency's cash-strapped owner Asian Hotels West have resigned from the board of the company. According to BSE filings, Raj Kumar Bhargava and Lalit Bhasin have resigned as Independent Directors of the company with effect from June 8, 2021.
This comes two days after Mumbai Hyatt Regency suspended operations amid a paucity of funds. The hotel informed staff on June 7 that the company wasn't receiving funds from the owners due to which it couldn’t pay salaries or sustain operations of the hotel. The hotel will now remain shut until further notice.
Asian Hotels West, on its part, informed stock exchanges on June 8 that Yes Bank held all funds including daily hotel collections in an escrow account due to default on payments to the bank.
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Appointed to the board in December 2008, Bhargava said in his resignation letter to the board that with Hyatt Regency Mumbai closing due to lack of funds, he doesn't see a future. He added that despite repeated requests, the chairperson did not respond to a discussion on the financial problems of the company.
"As such my usefulness to the company is no longer seen," added Bhargava, who was the chairperson of the audit committee of the board. Also appointed in 2008, Bhasin said that he was resigning due to “failure and refusal on the part of the Chairperson to convene a Board Meeting to discuss the acute financial crises which the Company is facing."
Bhasin also added that the company is not only in default of repayment of bank loans but also of statutory dues and that no remedial steps have been taken to meet the ‘financial disaster' that the company is facing.
"Despite repeated requests and directions of the Audit Committee and the Independent Directors, the Chairperson and couple of other directors have not considered it necessary to call for a Board Meeting to discuss not only the financial condition of the Company but also to consider the response to communications received from Sebi," he wrote.
He also flagged off an atmosphere of hostility among the promoters and said, "l do not wish to remain a part of this environment any longer."
Asian Hotels West runs Hyatt Regency Mumbai and its subsidiary Aria Hotels and Consultancy Services Private Ltd runs JW Marriott Hotel, Aerocity, New Delhi. The company had registered a loss of Rs 11 crore in the October to December quarter (Q3) of FY21 and a loss of Rs 31.9 crore for the nine months of the fiscal.
It is, however, unclear who is currently at the helm of the company. According to BSE disclosures, Sushil Kumar Gupta (who holds a 7.54 percent stake in the company) resigned from the position of chairman and managing director of Asian Hotels West on February 6, 2021.
However, the company has not informed the exchanges of any Chief Managing Director (CMD) appointment post that. The company's website does not mention any details about the post of CMD.
His resignation also came a day after his brother Sudhir Gupta dragged the company to National Company Law Tribunal (NCLT) Delhi. While reports suggest that it was a family feud, the matter has not come up for hearing yet. Sudhir Gupta holds a 1.82 percent stake in Asian Hotels West. According to the company's website, Sudhir Chamanlal Gupta and Sandeep Gupta (Son of Sushil Gupta) are currently Executive (Whole Time) Directors at the company.
(Edited by: By Jomy Jos Pullokaran)
First Published: IST