Banking News

SBI takes possession of PC Jewellers Ltd promoters residential properties

The country’s largest bank, the State Bank of India, has taken possession of two residential properties owned by PC Jewellers Ltd. in New Delhi after the firm and its guarantors failed to repay Rs 1,168.90 crore.

In a notification, the lender cautioned the public not to deal with the property and that any dealings with the property would be subject to the charge of the bank for an amount of Rs 1,267 crore, as well as the amount outstanding to other secured creditors. Already, the State Bank of India has filed a case against PC Jewellers in the National Company Law Tribunal, or NCLT.

In October last year, PCJ stated in the stock exchange filing that it had defaulted on Rs 3,466 crore in this regard, which led to banks recalling their loans and SBI moving the Debt Recovery Appellate Tribunal.

The firm in its financial results for the second quarter of this fiscal year have stated that SBI, Indian Bank, IDFC First Bank, and Union Bank (along with seven other banks) have moved the DRT Delhi against the company towards recovery of their dues.

“Company’s domestic turnover has been reduced to Rs 33 crore in Q2 FY 24 as against a turnover of Rs 836 crore achieved in the corresponding period of last FY. This is mainly on account of disruptions in its operations and the consequent liquidity squeeze resulting from ongoing litigation between the company and its lenders,” it noted in its financial results presentation. The firm reported a loss of Rs. 152 crore for the same period.

The company has stated it continues to explore the possibility of an out-of-court settlement with its lenders and is in regular touch with them for the same. In its financial results, the firm stated that during the six months ended September 30, 2023 it has shut down fourteen owned stores located at various cities and three franchises stores. Now the company has fifty six owned and seven franchises stores as on 30 September 2023. Currently three stores of the company located at Delhi remain temporarily shut due to ongoing court proceedings, it said.

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