Ex-SBI chief Pratip Chaudhuri gets bail in loan scam case
Premium- Chaudhuri was arrested on October 31 from his Delhi home by the Jaisalmer police for his alleged role in crippled ₹200 crore Garh Rajwada hotel project in the city
Former SBI chairman Pratip Chaudhuri, who was arrested in a loan scam case, was granted bail on Tuesday, according to The Print. He was arrested on October 31 from his Delhi home by the Jaisalmer police for his alleged role in crippled ₹200 crore Garh Rajwada hotel project in the city which was sold for ₹25 crore to Alchemist ARC in March 2014.
The project was financed by the bank in 2007. Chaudhuri has been a director on the board of the ARC since his retirement in September 2013.
The Jaisalmer police had said that a non-bailable warrant was issued against Chaudhuri on orders of the city court and he was arrested from his Delhi residence and brought to Jaisalmer.
This is a case of irregularity and fraud and his bail plea was rejected by the court and was sent to judicial custody for 14 days, the police had said.
SBI Chairman Dinesh Khara had described the arrest of Chaudhuri as 'extremely unfortunate' and hoped that he will be released unconditionally soon. He said SBI adheres to the best practices in corporate governance and “there have been no irregularities in the said case".
He said the issues of this magnitude are invariably dealt with at local level and the top management of the bank, including the chairman, is not involved at all, in such kind of decision making.
The arrest of Chaudhuri evoked responses from some top bankers, who called the decision "unfortunate" and a requested for protection of individuals by a legal framework for taking commercial decisions.
Kotak Mahindra Bank managing director Uday Kotak said that there was a "need to have a criminal justice system that protects bonafide banking/lending decisions". Punjab & Sind Bank Managing Director S Krishnan said that the arrest of the former SBI Chairman will definitely bring down the morale of bankers.
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In a statement, the bank clarified that the hotel project was sold to an ARC with due process in March 2014 after the retirement of Chaudhuri in September 2013 and he joined the board only in October 2014 — well after the loan sale to ARC.
The project remained incomplete for over three years and the key promoter passed away in between in April 2010. The account slipped into NPA in June 2010. Various steps taken by the bank for completion of the project as well as recovery of the bank's dues didn't yield the desired results, it said.
Hence as part of the recovery efforts, the dues were assigned to an Alchemist ARC for recovery in March 2014. This sale was done through a laid down process as per the policy of the bank, the statement said.
"As recovery efforts failed, approvals for sale to ARC were taken in January 2014, and the same was completed in March 2014. It transpires now that the borrower had initially filed an FIR with the state police against the sale of asset to ARC," SBI stated. It added that the bank was not made a party to the case. All the directors of the ARC, including Chaudhuri, who joined its board in October 2014, have been named in the case, it said.
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