Nitin Chandrakant Desai a noted art director who designed sets of Jodhaa Akbar and Devdas was under financial stress which may have been one of the reasons for him taking a drastic step. The 58-year old who was found dead at his Raigad studio had defaulted on a Rs 252 crore loan repayment to creditors and the Mumbai bench of the National Company Law Tribunal had initiated insolvency proceedings against it, reported PTI.
ND World's loan default
According to media reports ECL Finance, an Edelweiss Group promoted non-banking finance company had classified Desai's company under SMA-2 on March 30, 2020. This was right after the nationwide lockdown was imposed due to the spread of Covid-19. For those not aware SMA-2 is a special mention account under the early warning NPA guideline of the Reserve Bank of India and it indicates that the loan has been overdue between 61 to 90 days.
ND's world the company of the art director had defaulted on the interest payment of Rs 4.17 crore on January 30 and the loan was declared as NPA in March.
The total default amount as of June 30 was at Rs 252.48 crore.
The two-decade old company had taken a loan of Rs 31 crore in February 2018 after approaching ECL Finance for a loan of Rs 35 crore. Desai had approached the financial service firm earlier around 2016 as well for a loan of Rs 150 crore. Desai had mortgaged a total of 42 acres of land and some other properties for the loan.
Transfer to ARC
However, close to nine months later ECL Finance assigned the loan to CFM Asset Reconstruction Company and CFM Asset Reconstruction filed for an insolvency case against the company.
For those new to the Asset Reconstruction Company, these companies are specialised in buying NPAs from banks and NBFCs at a lower rate and then following up with the defaulters by taking them to bankruptcy courts or using the SARFAESI Act to take collateral of securities against loans or even doing a one-time settlement.
In the case of ND's Art World, CFM decided to invoke the insolvency and bankruptcy code proceedings in December 2020. It was during the pendency of the application that the debt was assigned to Edelweiss Asset Reconstruction Company and in July NCLT gave it the go ahead.
After which Edelweiss wrote a letter to the collector to confiscate the land.
While earlier local BJP MLA from Karjat, Mahesh Baldi confirmed that Desai died by suicide due to financial crisis, Somnath Gharge, Superintendent of Police, Raigad said that all angles will be investigated in the case.
Edelweiss to cooperate with authorities
On Thursday Edelweiss Asset Reconstruction Company promised full cooperation with authorities investigating the death of noted art director Nitin Desai. "We are committed to fully cooperating with all the relevant authorities. Our commitment to transparency, cooperation, and adherence to the legal process remains steadfast," it said in a statement.
Audio recordings by Desai found by Raigad police
Raigad police in Maharashtra, who are investigating the suicide, found 11 audio clips in a voice recorder found at Desai's office, an official said. In one of these clips or voice notes, he is heard stating that his company could not come out of the financial crisis it was facing because of the procedure adopted by the financial services firm.