More trouble for Bhujbal: SBI begins process to auction defaulting company

catch news

More trouble for Bhujbal: SBI begins process to auction defaulting company

The trouble only seems to be growing for veteran Nationalist Congress Party leader Chhagan Bhujbal. While he and his nephew are lodged in the Arthur Road jail over charges of money laundering, the Nashik branch of the State Bank of India has pronounced them wilful defaulters, and initiated the process to auction a company owned by the family.

Last month, the bank had attached the company, based in Nashik, to recover the Rs six crore loan and the interest accrued on it, along with other bank charges. The bank has published a notice to this effect in newspapers.

Newspaper_EMBED

Though various investigating agencies, such as the Anti-Corruption Bureau and the Enforcement Directorate (ED) have already attached assets worth several crore belonging to the Bhujbal family, none of them has yet been auctioned to recover dues.

Also read - Nephew Sameer's arrest a major blow for Chhagan Bhujbal

NCP deserts strongman

The SBI's auction notice has served a major blow to the erstwhile strongman of Maharashtra politics. Bhujbal is the first political leader from the state whose property is up for auction, for defaulting on a loan.

Interestingly, the NCP, which supported Bhujbal in every possible way, including party chief Sharad Pawar strongly backing him, seems to have decided to turn a blind eye to the happenings and to pleas from the Bhujbal family.

The family has suffered major financial problems after properties worth several crores were attached. The auction notice by SBI has only added to its troubles. The family has just 30 days to pay up all the dues, to avoid the humiliation of its property going under the hammer.

The SBI's case

Bhujbal's son Pankaj and nephew Sameer had taken loan of Rs six crore from the Nashik branch of SBI, in the name of Armstrong Energy Private Limited, situated at village Shilapur in Nashik district.

Pankaj and Sameer were guarantors for the loan, along with a corporate guarantee given by Rubberex Industries Private Limited.

The bank had issued a notice to the company, instructing it to repay the loan amounting to Rs 6,08,84,617, along with interest, cost and other bank charges. The amount was to be paid on or before 30 April 2015.

The bank has published a notice after attaching the company, in order to recover a Rs 6 crore loan

However, the company failed to meet the deadline and repay the due amount. As a result, the bank attached the movable and immovable assets in the name of Armstrong Energy Private Limited on 30 March this year, and similar action was initiated against Rubberex Industries Private Limited on 1 April.

SBI authorities have cautioned the general public to refrain from getting into any transaction pertaining to the assets of these companies without paying the bank dues.

The track record

The Bhujbals set up Armstrong Energy Private Limited at Shilapur, about 15 km from Nashik, in 2009.

The biomass plant is owned by Sameer and Pankaj. The company was named Armstrong because it is the English translation of 'Bhujbal'.

Interestingly, the plant, which was expected to generate 6 MW electricity, has been defunct ever since it was set up, under the pretext of repair works.

The Bhujbals have defaulted on a loan of Rs 11 Cr taken from the Nashik District Central Cooperative Bank. The loan was taken to operate the plant, but they have not repaid a single paisa.

Bank officials could not do much to recover the loan, given the political clout of the family. The family owns massive amounts of property in Nashik, such as the Bhujbal Knowledge City, Armstrong Water Purifier, Chandari Bungalow, Ganesh Bungalow, and eight acres of agricultural land.

Edited by Shreyas Sharma

More in Catch - Will things ever be the same again for Chhagan Bhujbal?

ED arrests Chhagan Bhujbal: first NCP bigshot to go to jail. Who's next?

ED catches up: the staggering wealth of Chhagan Bhujbal and Co

Ashwin Aghor @CatchNews