Edelweiss Passes Buck Back To Ecstasy, Says It Is Owed Money
Ecstasy, Edelweiss explained, is a defaulting borrower and owes around Rs 1,700 crore to Edelweiss ARC, including Rs 480 crore of principal overdues.
Clarifying on media reports of an alleged Rs 750 crore fraud case filed by the Mumbai Economic Offences Wing, Edelweiss Financial Services Ltd. said that the matter is "purely a civil dispute", and already under litigation in multiple forums.
The case was allegedly filed by Ecstasy Realty Pvt. against Edelweiss and its 15 associates last month, and the probe has now been taken over by the EOW. Edelweiss, however, informed the exchanges that "Ecstasy owes money to Edelweiss, not the other way around."
Ecstasy, Edelweiss explained, is a defaulting borrower and owes around Rs 1,700 crore to Edelweiss ARC, including Rs 480 crore of principal overdues.
"Ecstasy sought reliefs similar to the FIR contents, but the Bombay High Court denied interim relief on Sept. 13, 2022," it added.
The report alleged that the 'fraud' took place between 2018 and 2022, where Ecstasy secured a Rs 1,350 crore loan from Edelweiss Group, but only Rs 600 crore was disbursed, leaving Rs 750 crore allegedly misappropriated through evergreening.
Edelweiss, however, painted a different picture in its clarification. It said that Ecstasy struggled to pay interest due to slow sales and delays in occupancy certificates. Between 2018 and 2022, a moratorium request submitted was also rejected by the debenture holders, it added.
"Despite efforts, Ecstasy’s account was classified as an NPA in June 2022," it said.
In December last year, the Reserve Bank of India had lifted business restrictions on two group companies — ECL Finance Ltd. and Edelweiss Asset Reconstruction Co. — after remedial measures were put in place by the companies. Earlier in the same month, Edelweiss unit EAAA India Alternatives Ltd. filed preliminary papers for an IPO via a Rs 1,500 crore OFS.
