Under pressures from various quarters, the Edelweiss Financial Services Ltd (EFSL) has attempted to ‘connect’ a NCLAT verdict with the suicide of ace art director Nitin Desai -- both 24 hours apart.
In a filing to the BSE on Sunday, the EFSL confirmed that it had extended loans of Rs 150 crore (2016) and Rs 35 crore (2018), as stated in the Raigad Police FIR (August 4) to Desai’s ND Art World Pvt. Ltd (NDAWPL), “at prevailing markets rates”.
However, NDAWPL encountered financial difficulties in 2019 and went into default, and attempts to improve its financial condition failed to bear fruit.
The loans were taken over by CFM Asset Reconstruction Co. Pvt. Ltd which also initiated legal proceedings.
The Edelweiss ARC acquired a portfolio of assets from CFM under an auction process which included NDAWPL, and continued with the legal actions initiated earlier.
Eventually, the NDAWPL was admitted under IBC by the National Company Law Tribunal (NCLT) on July 25.
“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,” the EFSL said in the filing.
The Edelweiss has not referred to the series of allegations levelled in the Raigad Police FIR, based on a complaint by Desai’s widow, Neha on August 4.
Denying any wrongdoings, the Edelweiss Group has reiterated that it is “deeply saddened” by Desai’s tragic demise, and it is “a big loss to the Indian film industry”, assuring it “will cooperate fully” with the authorities” in the case, and that “pursuing recoveries on NPA accounts is not just a right of creditor but also an obligation”.
The FIR has named Edelweiss ARC Managing Director and CEO R. K. Bansal, C-MD Rashesh Shah, Smit Shah, Keyur Mehta (both of a subsidiary) and Jitendra Kothari (Interim Resolution Professional).
Incidentally, the FIR mentions that after the insolvency resolution proceedings were initiated, the studio officials and Desai’s lawyer Vrunda Vichare had informed Neha Desai that NCLT’s Kothari would reach the studio with bouncers to take control of the property on July 29 -- four days after the NCLT ruling and three days before the NCLAT verdict, both against Nitin Desai.
The FIR cites a recording left behind by Desai for Vichare, where he had narrated how 2-3 investors were ready to invest in the studio, but the Edelweiss and its honchos demanded ‘double-triple the dues’ and pressurised him in different ways.
“Smit Shah, Keyur and Bansal have looted my studio for their selfish motives… they didn’t accept my proposals… they tried to trap me,” said a desperate sounding Nitin Desai in the recordings quoted in the FIR.
“Ya lokaani majhi vaat lavli aahe(These people have destroyed me)," were Desai’s words, adding that “these monsters threatened, pressured" him, forced him to sell off his prime office in Powai’s Hiranandani Complex, and conspired to finish him off, as per the FIR.
The FIR adds that the studio was set up in 2004 at Khalapur, Raigad, and soon became a popular shooting venue for films, teleserials, and his fame grew.
It added that in 2016, Rashesh Shah came with an investment proposal, sweet-talked and lured Desai with big dreams for the developing the studio, and accordingly, sanctioned got two loans -- Rs 150 crore (November 2016) and Rs 35 crore (February 2018) -- against mortgaging the property.
Neha Desai said that though he was paying his EMIs regularly, in April 2019, the Edelweiss officials suddenly put immense pressure on him to pay up six months’ advance EMI from May-October 2019, which he complied after selling off his office, and continued to pay up the EMIs regularly till February 2020.
Then came the Covid-19 pandemic lockdown series, work at the studio had completely halted and Nitin Desai was delayed in repaying his loans/EMIs’, though his own losses were pegged at some Rs 100-crore.
“Yet, my husband expressed readiness to make a One Time Settlement and clear the Edelweiss loans, but the company officers didn’t respond and instead sent a legal notice threatening action,” said Neha in the complaint.
He and the family even attempted to rope in outside investors but Edelweiss officials didn’t allow the investors to even step in the studio, “and it appeared that they wanted to usurp our property”, putting great stress on Desai, said Neha.
Pleading for a restructuring of the loan or a One Time Settlement, she said the Edelweiss people remained aloof and without informing him, they allegedly made a loan cheque ‘bounce’ and slapped him with a notice under the relevant laws.
Nitin Desai said in his recordings that rather than acting as an NCLT Administrator in the matter, "Kothari appeared to be working under pressure from the Edelweiss", and alleged they wanted to take over the studio and exploit it for commercial purposes.
The sad story ended when the acclaimed art director took his life in one of his beloved studios on the morning of August 2, stunning the entertainment and political worlds.
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