Fraud case: EOW summons two executives from top finance company

The dispute between a Juhu businessman and the financial firm Edelweiss has now reached Mumbai police headquarters Businessman Hitesh Chhatwal has approached Police Commissioner Sanjay Barve with a complaint that Edelweiss Asset Reconstruction Company has committed a fraud with him and his companiesEdelweiss has denied the allegations but two executives of the company mdash Amit Agarwal and Rajkumar Bansal mdash have been summoned by the Economic Offences Wing EOW for a further inquiry in the caseSpeaking to midday Chhatwal claimed that in December 2018 he had taken up the Edelweiss case with the EOW However things were not moving and a section of officers felt that there was no merit in the case They were even planning to close the case Under the Right to Information Act RTI I got my hands on the papers that clearly show that the police wanted to close the case the Juhu businessman statedAggrieved by the police not registering the FIR and trying to close the case Chhatwal finally decided to approach BarveMr Barve patiently heard the case and instructed EOW officials to investigate it Accordingly the two executives from Edelweiss were called for an inquiry by EOW the businessman saidAccording to the complaint made by Chhatwal with the EOW Edelweiss ARC had acquired the financial assets loan liability of Perfect Engineering from the State Bank of India SBIHowever according to Chhatwal Edelweiss had projected the value of the engineering firm as being much higher than its actual costAccording to Chhatwal Edelweiss had taken over a Rs 287 crore loan of Perfect Engineering an auto parts manufacturing company which had been restructured at a value of Rs 192 crore The restructuring happens owing to certain events that may lead to devaluation Chhatwal said We made an investment in the company in 201415 based on the representation by Edelweiss executives We invested Rs 54 crore which included loan and equity But later we realised after the death of the engineering companys promoter that the total asset value of the firm was just R78 crore of which Rs 34 crore were statutory dues When we studied the case and investigated it further we saw that Edelweiss had hidden these facts from us We felt cheated and accordingly approached the EOW Chhatwal addedEdelweiss has refuted all allegations of wrongdoing PicShadab KhanIn fact Chhatwal claimed that a detailed investigation and deepdive by the police would lead to a bigger scam where public sector banks are being cheated and are victims of this modus operandiWhen contacted Barve refused to comment on the issue While Bansal did not respond to calls Agarwal answered the call and told us to get in touch with the corporate communication wing of Edelweiss see box Edelweiss saysExpertSpeakAn expert in the financial sector on condition of anonymity claimed that he cannot comment on this particular case But many times equity investors and ARCs are at loggerheads when it comes to closing deals While financial institutes are looking to raise funds the equity investor resists it as it leads to dilution of stake which results in such disputes the expert addedEdelweiss saysA spokesperson for Edelweiss said In March 2014 Edelweiss ARC acquired a debt of Perfect Engineering an auto component manufacturing company from SBI with the intent to revive and restructure the company to keep it going and retain jobs Unfortunately the prolonged downturn in the auto industry coupled with the demise of the promoter in October 2018 led to an erosion in the value of the company Edelweiss is keen on finding a resolution to save the asset through capital infusion from the remaining promotersequity investors Mr Hitesh Chhatwal has been an equity investor in Perfect Group from 201415 and was brought in by the promoter now deceased of the companyThe spokesperson further mentioned that the allegations made by the investor are baseless and without merit and are detrimental to the resolution of the assetCatch up on all the latest Mumbai news crime news current affairs and also a complete guide on Mumbai from food to things to do and events across the city here Also download the new midday Android and iOS apps to get latest updates