At the age of 57, Nitin Chandrakant Desai, an art director and producer, has tragically died by suicide. His lifeless body was discovered at his studio in Karjat, Maharashtra, prompting the police to suspect it as a case of death by suicide. Further investigations are underway, and all aspects are being explored, according to a statement from Somnath Gharge, SP, Raigad. The last rites will be conducted on Friday.
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According to a PTI report, Desai’s company, ND’s Art World Pvt Ltd, had encountered financial difficulties and had defaulted on a substantial Rs 252-crore loan from its financial creditor. This led to a bankruptcy court admitting an insolvency petition against the company last week. The financial woes began in January 2020, after the company had borrowed Rs 185 crore through two loans from ECL Finance in 2016 and 2018. The total default amount, as of June 30, 2022, stood at Rs 252.48 crore, as per an order by NCLT.
Before the court’s order, Desai’s company had cited a fire incident that occurred on May 7, 2021, at the studio, resulting in property loss. They blamed the creditors for sending a recovery notice on the same day as the fire incident. Additionally, local media reported that the financial creditor had approached district authorities in Raigad to take possession of ND Studio a few months ago. However, the reasons behind the art director’s tragic decision are yet to be determined.
The accumulation of debt:
According to the NCLT order, the original petition was filed by financial creditor CFM Asset Reconstruction Private Limited against the corporate debtor ND’s Art World Private Limited, seeking to resolve an outstanding debt of Rs 252.48 crore.
However, later in 2020, the debt was transferred to M/s Edelweiss Asset Reconstruction Company Limited.
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As per the order, ND’s Art World had initially approached ECL Finance Limited (ECLFL) for a loan of up to Rs 150 crore, and in November 2016, ECLFL approved a loan of Rs 150 crore. Alongside the first loan agreement, various security documents were executed by the debtors, namely Nitin Desai, his wife Naina Desai, and KND Investments and Finance Private Limited, to secure the loan.
In 2018, the company once again approached ECLFL, this time for a loan of Rs 35 crore, and although the loan was sanctioned, the corporate debtor only availed Rs 31 crore.
As a result, the total loan amount aggregated to Rs 181 crore. Due to irregular and delayed payments of principal instalments, ND’s Art World was classified as SMA-2 in the books of ECLFL on March 30, 2020. Special Mention Accounts (SMAs) are categorized based on the duration of overdue periods. SMA-1 status is assigned when the overdue period ranges from 31 to 60 days, while SMA-2 status is applied when the overdue period is between 61 to 90 days.
On January 31, 2020, ND’s Art World failed to make an interest payment of Rs 4.17 crore for the two loans.
As of March 31, 2021, the account was classified as a non-performing asset (NPA) since the company had defaulted on the entire outstanding amount.
By March 31, 2022, the company had also defaulted on the payment of the second loan, amounting to Rs 33.24 crore.
Subsequently, on May 9, 2022, ND’s Art World defaulted on the entire principal payment for the first loan, which was Rs 147.37 crore.
The company’s defaults led to an outstanding amount of Rs 247.77 crore (for both loans) as of May 15, 2022, and this amount was deemed immediately due and payable following a loan recall notice. However, despite this notice, no payment was received from ND’s Art World, and as of June 30, 2022, the total default amount reached Rs 252.48 crore.
Upon hearing the news of his passing, film and TV personalities expressed profound shock and offered heartfelt tributes: