On 4 August, an FIR was registered against five persons including officials of ECL Finance and Edelweiss Group for alleged abetment of art director Nitin Desai's suicide. The parent company, Edelweiss has now responded to the allegations stating that no undue pressure was applied to Desai over the loan he had taken, as per a report by The Indian Express.
ECL Finance is a non-banking finance arm of the Edelweiss Group. An audio note left behind by Desai blamed them for his poor financial condition, as per the police.
In continuation of the report, on Sunday, in a filing with the stock exchange, Edelweiss said, “The interest rate charged by ECLFL was as per prevailing market rates; legal processes for recovery are elaborately established under RBI and IBC guidelines and were duly followed by EARC. being put on the borrower for recovery. We will cooperate fully with the authorities.”
They also went on to add, “..We would like to place on record the following facts, which will establish that there was no wrongdoing of any nature. Shri Nitin Desai was the promoter of ND’s Art World Pvt Ltd (NDAWPL), which had obtained loans of Rs 150 crore and Rs 35 crore in 2016 and 2018 respectively from ECL Finance Ltd (ECLFL).”
Edelweiss added that while NDAWPL was given financial assistance at prevailing market rates, “NDAWPL encountered financial difficulties in 2019 and went into default thereafter.”
All attempts to aid the financial condition went in vain so due legal actions were followed, they stated: “The loans were assigned to CFM Asset Reconstruction Company Pvt Ltd (CFM), which had initiated various legal actions under due provisions of law. Edelweiss Asset Reconstruction Company (EARC) acquired a portfolio of assets from CFM under an auction process which included NDAWPL and merely continued with legal actions that were initiated earlier.”
The company was eventually admitted under Insolvency and Bankruptcy Code (IBC) by NCLT Mumbai on 25 July 2023.
They concluded, “Shri Nitin Desai’s appeal against the NCLT order was dismissed by the Honourable Appellate Tribunal (NCLAT) on August 01, 2023, and he took his life the following morning. We would like to state that ECLFL and EARC have acted fully in accordance with the letter and spirit of law and the regulatory framework established by the RBI which prescribes that, pursuing recoveries on Non Performing Assets (NPA) accounts is not just a right of creditor but also an obligation”.
The FIR was filed against five persons, including Rashesh Shah, chairman and managing director of the company, after the national award-winning art director was found hanging in his studio on 2 August.
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