No undue pressure exerted on Nitin Desai for recovery: Edelweiss ARC

Mumbai: Hours after a case was registered against its top officials for allegedly abetting the suicide of Bollywood art director Nitin Desai, Edelweiss ARC on Friday denied that it had put pressure on him for repaying loans.

Stating that it followed all legal processes mandated by the RBI, the Asset Reconstruction Company also clarified that Desai, who had defaulted on a Rs 252 crore loan, was not charged an excessive interest rate.

“Neither was the interest rate charged excessive nor was there at any time undue pressure being put on the borrower for recovery,” the company said in a late evening statement.

Earlier in the day, the Raigad police in Maharashtra registered a first information report against Edelweiss Group chairman Rashesh Shah and four others including officials from the ARC, for allegedly abetting Desai’s suicide.

Deputy Chief Minister Devendra Fadnavis had on Thursday told the state legislature that the investigators will probe whether Desai was charged high interest for the loan and if he was under mental stress.

The Edelweiss ARC statement said the company followed its own detailed procedures while trying to recover the money at “great expense” and time.

“We respect the need for the authorities to inquire into such tragic events and will cooperate fully with the enquiry process. We are confident that they will also conclude that we have acted lawfully,” it said.

The company termed the circumstances under which Desai died as “tragic” and added that it is saddened by his demise.

Desai had availed of loans in 2016 and 2018 for setting up a theme park at his studio and for working capital, the statement said, adding that his company faced financial difficulties since 2020.

The account had to be referred to the National Companies Law Tribunal in 2022, which admitted its application for initiating insolvency process on July 25, the company said.

It can be noted that on August 1, the National Companies Law Appellate Tribunal turned down Desai’s appeal. The art director of acclaimed films like "Lagaan" was found dead in his studio in Karjat a day later.