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Hotel related to Pratip Chaudhuri arrest was handed over in shambles to new management – Livemint

  • A 24 crore loan granted by SBI to Hotel Gaudavan in tranches, beginning January 2008. The loan was restructured in January 2009, and repayments were rescheduled. The loan was sold to Alchemist ARC in March 2014

MUMBAI: Erstwhile promoters of Hotel Gaudavan Pvt Ltd, the company at the heart of former State Bank of India (SBI) chairman Pratip Chaudhuri’s arrest, handed over the property in a pitiful state post resolution under the Insolvency and Bankruptcy Code in 2017, according to an official aware of the deal.
“Since the approval of the resolution plan by NCLT, the ex-promoters have created all sorts of hurdles in the implementation of the resolution plan,” said the official cited above on condition of anonymity as he is not authorized to comment.
He said other than the structure of the hotel everything had to be changed or replaced. An amount of 20 crore has been spent on the hotel and additional investment is being made just to bring the hotel into a habitable state. After four years of repairs, 20 rooms of the 100-room hotel are operational, he added.
“Subsequent to taking possession, we were hardly able to run the hotel as we faced several issues due to the extremely poor upkeep and management by the erstwhile promoters. When we took over the company in terms of NCLT order dated 13 December 2017, the acquired assets of the company were in extremely poor condition and the hotel was almost inhabitable,” he said.
According to him, the boilers, water heaters, air-conditioning, furniture, kitchen, paint and linens had not been kept well and thus all had to be subsequently replaced.
“Due to covid-19 there has been little to no business and the repair and renovation has still not been completed. The defaulting borrowers had left the hotel in shambles and we are still facing consequences of the poor management and upkeep to date,” he said.
The case relates to a 24 crore loan granted by SBI to Hotel Gaudavan in tranches, beginning January 2008. The loan was restructured in January 2009, and repayments were rescheduled. The loan was sold to Alchemist Asset Reconstruction Company (ARC) in March 2014. It was then referred to the National Company Law Tribunal (NCLT) for resolution and was taken over by JFC Finance (India) Ltd in December 2017.
Chaudhuri was arrested on 1 November by the Rajasthan state police after a Jaisalmer court issued an arrest warrant on a petition by the borrower. According to a 2 November Times of India report, the complaint that led to his arrest claims Chaudhuri sold the property below market price to an asset reconstruction company whose board he later joined. He was released on bail on 9 November. Interestingly, Chaudhuri retired as SBI chairman in September 2013, six months before the soured loans were sold to the ARC for recovery.
An email sent to JFC Finance (India) Ltd remained unanswered till press time and the erstwhile promoters of Hotel Gaudavan Pvt Ltd could not be immediately reached for a comment.
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