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All Independent Directors of Asian Hotels (West) resign; auditors yet to clear FY21 results

Independent directors are disillusioned by the management and have alleged irregularities at the company which is already struggling as business travel has collapsed because of the pandemic.

June 28, 2021 / 10:38 AM IST
Almost all the independent directors of Asian Hotels cited common reasons for their resignations.

Almost all the independent directors of Asian Hotels cited common reasons for their resignations.

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The two remaining independent directors of Asian Hotels have resigned, citing irregularities and non-compliance by the troubled company that owns Hyatt Regency in Mumbai and the JW Marriott Hotel New Delhi Aerocity.

Tamali Sengupta and Arun Saxena, resigned on June 26, a little over two weeks after two other independent directors, Lalit Bhasin and RK Bhargava, quit the board of Asian Hotels (West) and nearly 20 days after Hyatt Regency, Mumbai suspended operations saying the owner failed to provide funds and salaries to staff.

Almost all the independent directors cited common reasons for their resignations. These included allegations of reluctance of the management to overcome the financial crisis, no clarity in arranging funds for the future, lack of clarity in running the operations and hostility among promoters. The Delhi-based company is promoted by Sushil Kumar Gupta, who is its Chairman and Managing Director.

Asian Hotels (West) also disclosed that it was not in a position to submit annual audited financial results for the period ended March 31 with the timelines prescribed as the results are yet to be finalised by the statutory auditors of the company.

“All the members of the Board are aware that the company is facing a serious financial crunch due to which operations of the hotel have been stopped. (The) company is also non-compliant with respect to appointment of CFO and replies to SEBI correspondence. (The) company has defaulted in payment of loans of Yes Bank, payment of salary, wages of manpower and officials, statutory dues etc,” said Arun Saxena, independent director of the Asian Hotel (West) in his resignation letter.

“The company could not avail the loan sanctioned from YES Bank under ECLC scheme. Now the company has also defaulted various provisions of Companies Act and LODR. In these circumstances I feel I will not be able to contribute much as an independent director of the company. Therefore, I tender my resignation as independent director from the board of Asian Hotels (West) with immediate effect,” Saxena added.

“I am resigning from the board of Asian Hotels (West) and all its committee’s with immediate effect. The near cessation of business travel due to COVID led to Hyatt Mumbai Hotel shutdown. I feel I can’t contribute anything further as an Independent Director on the company’s board in the current situation,” said Tamali Sengupta.

On June 7, the general manager of Hyatt Regency, Mumbai, Hardip Marwah announced a temporary closure of the five-star property through a letter sent to the hotel’s staff. As per filings made to the stock exchanges, Asian Hotels (West) failed to repay the principal and interest of Rs 4.32 crore taken from Yes Bank as term loans. The defaults included a car loan EMI of Rs 400,000. Asian Hotels has a total debt of Rs 262.54 crore.

Swaraj Baggonkar
Swaraj Baggonkar
first published: Jun 28, 2021 10:38 am