State Bank of India (SBI) on Monday issued a clarification after its former chairman Pratip Chaudhuri was arrested in a loan scam. India largest bank said while Chaudhuri retired from the services of the bank in September 2013, the assets were sold in March 2014.
The scam relates to a loan given to a private hotel.
SBI, in a statement, said, the hotel project, ‘Garh Rajwada’, was financed by SBI in 2007. However, it remained incomplete for three years. In 2010, the key promoter passed away, following which the project turned into a non-performing asset (NPA), it added.
SBI said it took various steps for completion of the project and recovery of dues, but these didn’t yield the desired results. "Ultimately, SBI assigned the NPA to an asset recovery company named Alchemist Asset Recovery Company Ltd in March 2014. All due process was adhered to, said the statement"
The statement added that the borrower was subjected to the IBC process by Alchemist, wherein the asset was acquired by an NBFC in December 2017 under the NCLT.
The bank said the borrower had initially filed an FIR with the state Police against the sale of the asset to the ARC. "When the police filed a negative closure report, the borrower filed a ‘Protest petition’ before the CJM court," SBI said.
SBI was not made a party to this case, the statement highlighted.
“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," the bank said.
SBI further said all due processes were followed while making the said sale to ARC, adding that it has already offered complete cooperation to the law enforcement and judicial authorities