Nitin Desai suicide: Edelweiss denies any wrongdoing, says recovery efforts a right and obligation of creditors

economictimes.indiatimes.com:

Edelweiss Group on Sunday said mounting recovery efforts from defaulters are not just a right, but also an obligation of creditors. Acknowledging that its chairman and managing director Rashesh Shah has been named along with four others in the first information report (FIR) in connection with art director Nitin Desai suicide case, Edelweiss Financial Services maintained that it did not put any «undue pressure» on Desai.

Desai, whose company had defaulted on a Rs 252 crore debt and had failed in securing any relief from the bankruptcy courts against insolvency proceedings, is alleged to have committed suicide last week. He was found dead at his studio on the outskirts of the financial capital.

The Edelweiss statement said group companies ECL Finance, which had first extended the loans, and Edelweiss Asset Reconstruction Company, which later took over the loan for resolution, have acted in accordance with law in letter and spirit and also RBI regulations. The regulations prescribe that «pursuing recoveries on NPA accounts is not just a right of creditor but also an obligation».

«At no time was there any undue pressure being put on the borrower for recovery,» it added. Reiterating that the interest rate charged by ECL Finance was as per prevailing market rates, the statement from the listed entity pointed out to the sequence of events with the borrower.

Loans of Rs 185 crore were given to ND's Art World Pvt Ltd in 2016 and 2018 towards capital expenditure for the theme park and partly for repayment of existing debt, general corporate purposes and working capital needs, it said. «In view of this recent development (the FIR) and the media articles, we would like to place on record the following facts, which will establish