Clarification by the SBI on the Hotel project in Jaisalmer, Rajasthan financed by the Bank in 2007

Clarification by the State Bank of India (SBI) on the recent development around the Hotel project in Jaisalmer, Rajasthan financed by the Bank in 2007

‘Garh Rajwada’ was a hotel project in Jaisalmer, financed by the Bank in 2007. The project remained incomplete for over 3 years and the key promoter passed away in April 2010. The account slipped into NPA in June 2010. 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 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.

As recovery efforts failed, approvals for sale to ARC were taken in Jan 2014, the assignment to ARC was completed in March 2014. It transpires now that the borrower had initially filed an FIR with the State Police against the sale of asset to ARC. Aggrieved against the negative closure report filed by Police authorities, the borrower had filed a ‘Protest petition’ before the Hon’ble CJM Court. Incidentally SBI was not made a party to this case. All the directors of that ARC including Mr. Chaudhuri, who joined their Board in Oct. 2014, have been named in the said case. Incidentally, Mr. Chaudhuri retired from the Bank’s service in Sep. 2013.

It appears from the copies of the proceedings now accessed by us that the Hon’ble Court do not appear to have been briefed correctly on the sequence of events. 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.