MUMBAI: Financial services company Edelweiss which has been slapped with a First Information Report (FIR) against its promoter directors in connection with the suicide of noted art director Nitin Desai at his Karjat (near Mumbai) based ND Studios has denied any undue pressure for recovery of their loans. 

In a filing with the stock exchanges, Edelweiss has said that Desai's studio ND’s Art World Pvt Ltd (NDAWPL) had taken loans of Rs 150 crore and Rs 35 crore in 2016 and 2018 respectively and had defaulted since 2019. After several attempts to recover the amount, the company continued with initiating legal action as per law. 

The company said that they have acted fully in accordance with the letter and spirit of the law and the regulatory framework established by the Reserve Bank of India (RBI) governing financial services company for recovery of outstanding loans. It also said that the interest rate charged was as per prevailing market rates and legal processes for recovery are elaborately established under RBI and the Insolvency and Bankruptcy Code (IBC) guidelines.

"At no time was there any undue pressure being put on the borrower for recovery," the company said in its statement. 

Desai who was a well-known personality in the film industry was found hanging in his studio on 2 August shocking everyone, and an audio recording left by Desai apparently blamed his creditors for his poor financial condition that left him with no option, but to take the drastic step. He has also pleaded with the state government to take over NDAWPL and use it for promoting art.

Desai's studio NDAWPL, had a principal loan along with accrued interest outstanding to the tune of Rs 252.50 crores with ECL Finance Ltd (ECL) arm of the diversified Edelweiss Group and an NCLT Mumbai had ordered recovery proceedings under insolvency laws on July 25, 2023. 

The company statement also said that Desai’s appeal against the NCLT order was dismissed by the Appellate Tribunal (NCLAT) on August 01, 2023, and he took his life the following morning.

Deputy Chief Minister Devendra Fadnavis announced in the Maharashtra Assembly last Thursday that Edelweiss and its CEO Rashesh Shah would also be investigated in connection with the alleged suicide of Nitin Desai. Subsequently, an FIR was filed at Khalapur Police Station, against 4 persons and Rashesh Shah, Chairman & Managing Director of Edelweiss.

The company has said it would cooperate fully with the authorities and were confident that the processes set in motion will reaffirm that they acted well within the boundaries set and the frameworks established by the RBI.