SBI says 'factual inaccuracies' in compliant lodged against former chief Pratip Chaudhuri

Former SBI chairman Pratip Chaudhuri [Image: Wikimedia Commons]

State Bank of India (SBI) has said there are factual inaccuracies in the complaint lodged by erstwhile promoters of Godawan Group against its former chairman Pratip Chaudhuri who was arrested on November 1 in a case of loan fraud.

Jaisalmer Police arrested Chaudhuri in an alleged loan scam related to properties owned by Godawan Group, which took a Rs 24 crore loan from SBI in 2008 to construct a hotel.

“It appears from the copies of the proceedings now accessed by us that there have been some factual inaccuracies in the complainant’s version submitted to the Hon’ble court,” SBI said in a statement made available to Moneycontrol.

The clarification came after former SBI chairman Rajnish Kumar on November 1 called Chaudhuri’s arrest a motivated action. “This seems to be a case of highly motivated, high-handed action. This seems to be an error of judgment. There is a due process and set of rules laid out by the RBI for the sale of assets to ARCs (asset reconstruction companies). Where is the corruption here?” Kumar told Moneycontrol in an exclusive chat.

Allegations against Chaudhuri include properties worth Rs 200 crore being sold for Rs 25 crore after the bank seized them for defaulting on the loan.

Going by the dates in a clarification issued by State Bank of India, the approvals for the sale of Godawan properties to Alchemist Asset Reconstruction Company (ARC) were taken in January 2014 and the assignment to the ARC was completed in March 2014.

Chaudhuri retired from service in 2013 and had joined the ARC's board in October 2014.

The market value of the property was assessed as Rs 160 crore in 2017, a report in The Times of India said. Godawan Group had approached courts after the properties were sold for a lower valuation.

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

“Various steps taken by the bank for the completion of the project as well as recovery of the bank’s dues didn’t yield desired results. Hence, as part of the bank’s recovery efforts, the dues were assigned to an ARC for recovery in March 2014,” SBI said.

The sale to ARC by was done through a laid down process as per the bank policy.

"We further understand that the borrower was subjected to the IBC process by the said ARC and the asset has been acquired by an NBFC in December 2017, again through the due process under the orders of NCLT, Delhi," the bank said in a statement on November 1.