Pratip Chaudhuri, former chairman of State Bank of India, was arrested by the Jaisalmer Police in a case involving the sale of a non-performing account by India’s largest lender to an asset reconstruction company.
Chaudhuri was arrested from his residence in Delhi, the Jaisalmer Police said in a statement on its website. The arrest, however, is not related to his role at SBI.
The action comes over alleged discrepancies in the sale of Garh Rajwada, a hotel project in Jaisalmer, Rajasthan, by SBI to Alchemist Asset Reconstruction Co. Chaudhuri is a director on the board of the stressed asset buyer.
In a public clarification, SBI said it had assigned the recovery of loans associated with the hotel project to Alchemist ARC in March 2014. Chaudhuri retired from SBI in September 2013. India’s largest lender said all due process was followed during the sale of the loan account, which had turned non-performing in June 2010.
After buying the project, Alchemist ARC referred the case to the insolvency court. In December 2017, a non-banking finance company bought the hotel project under the Insolvency and Bankruptcy Code, the SBI statement said.
The bank said “the borrower had initially filed an FIR with the state police against the sale of asset to ARC. Aggrieved against the negative closure report filed by police authorities, the borrower had filed a protest petition” before chief judicial magistrate’s court.
According to the bank, the court appears to not have been correctly briefed on the sequence of events involved in the sale.
SBI is not a party to the case filed by the borrower against Alchemist ARC.
The phone number of Alok Dhir, promoter of Alchemist ARC, was not reachable.
Chaudhuri was the face of SBI’s recovery efforts against Kingfisher Airlines in 2012-13, when banks had recognised the account as an non-performing asset.
His arrest sparked outrage. Rajnish Kumar, former chairman of SBI, called it a “ridiculous action”.
