On August 2, Desai allegedly died by suicide. In one of his voice notes found in a video recorder at his office, Desai expressed his inability to overcome his financial challenges due to the procedures employed by the lender. Edelweiss, however, denied putting any pressure on Desai to repay the loan. It also said that it did not charge any excessive interest rate on the loan availed by Desai. The interest rate charged was “as per prevailing market rates”, said Edelweiss in a regulatory filing on Sunday, adding that legal processes for recovery are elaborately established under RBI and IBC guidelines and those were duly followed.
On Sunday Edelweiss confirmed that an FIR was filed against its chairman and MD Rashesh Shah and four other persons in connection with Desai’s death. A lawyer said even though there’s an FIR against a key management person, s/he can continue in her/his position as legally one is innocent until proven guilty. “An allegation cannot lead to resignation,” said the lawyer. Desai, promoter of ND’s Art World, had taken loans of Rs 150 crore and Rs 35 crore from Edelweiss .
Recovery of Non-Performing Accounts: Creditor’s Right
MUMBAI: Edelweiss Financial Services said on Sunday that recoveries on NPA accounts are not just a right of a creditor but also an obligation. Stating that it has acted in accordance with the letter and spirit of law regarding the recovery of late Nitin Desai‘s Rs 185 crore loan, Edelweiss said the regulatory framework established by the RBI prescribes that “pursuing recoveries on NPA accounts is not just a right of creditor but also an obligation”.
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