Explained | Loan scam case: All you need to know about Gaudavan Group

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The arrest of former State Bank of India chairman Pratip Chaudhari has sent shock waves in the public sector banking space.

The arrest by Jaisalmer Police was done in an alleged loan scam case involving Gaudavan Group and Alchemist ARC.

Gaudavan Group operates a hotel called Fort Rajwada, the group had taken a loan from SBI in 2008 to construct a hotel calles Garh Rajwada’.T he group wasn’t able to repay the loan and it became an NPA i(non-performing asset) in 2010.'

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SBI assigned it to an asset reconstruction company in March 2014 and the asset had been acquired by an an NBFC in 2017.

All about the case:

Q. Who owns Gaudavan Group?

As per official records, Gaudavan Group was established on October 6, 1986 with a registered address as Fort Rajwada in Jaisalmer. Fort Rajawada is a luxury hotel located in Jaisalmer, Rajasthan.

Registered as Hotel Gaudavan Private Limited is involved in hotels including camping sites and other provisons of short-stay accommodation.

The directors on board are Vijay Kumar Chopra, Meenakshi Sharma & Vinay Khosla. Khosla is the managing director whereas Chopra and Sharma are nominee directors, as per data available on Zauba Corp.

Q. What did Gaudavan Group do?

The hotel had taken a loan of Rs 24 crore from SBI in 2008 which it failed to repay and slipped into NPAs in 2010. The bank started the recovery process and then sold it off to Alchemist ARC and was acquired by an NBFC in 2017.

However, the borrower filed an FIR with the state police against the sale of asset to an ARC, further the borrower filed a ‘protest petition’ before the CJM Court without making SBI a party to the case.

The Gaudavan Group had named all the directors of the ARC in the case including SBI Chairman Pratip Chaudhari who had joined the board of the ARC in October 2014.

Chaudhari’s tenure as Chairman of SBI ended in September, 2013.

Q. What is SBI saying?

SBI in a statement issuing clarification said 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, it further added.

The bank also said it followed all due process while making the said sale to ARC.

Q. What is Alchemist ARC saying?

It said in a statement that Hotel Gaudavan Pvt Ltd has repeatedly taken legal machinery for a ride to evade laws and is working towards harassing and defaming the board of AARC and the arrest of Pratip Chaudhari is bizarre.

The Supreme Court had previously quashed an FIR registered by the borrower in Jaipur and the apex court upheld the IBC process followed by AARC for resolution of Hotel Gaudavan’s assets, the ARC said.

It further added that SBI only assigned loans to AARC and didn’t sell the properties. The allegations by the Hotel Gaudavan Private Limited are an act of their notorious nature.