Canara Bank has recovered all its outstanding dues of around ₹510 crore from debt-ridden Rajesh Exports. The recovery came after a Debt Recovery Tribunal (DRT) ordered the company to deposit the money to avoid the sale of its properties.
Recovery Case Started in 2021
The bank started DRT proceedings after efforts to recover the money through the bankruptcy process were blocked. The company’s loan account became a non-performing asset (NPA) in 2020, and the case was admitted before the DRT in 2021.
Canara Bank had also approached the National Company Law Tribunal (NCLT) under the insolvency process and started recovery action under the SARFAESI Act. However, the Karnataka High Court had stayed these recovery actions, while the DRT case continued.
DRT Order in Favour of Canara Bank
The DRT recently ruled in favour of Canara Bank after a long legal process. Following the order, the bank approached the Karnataka High Court to implement the decision. The High Court allowed the order to be implemented and dismissed the petitions filed by Rajesh Exports against it.
After this, the company deposited the required amount into a Canara Bank account, allowing the bank to recover its entire ₹510 crore dues.
Rajesh Exports Under SEBI Scanner
Rajesh Exports, a Bengaluru-based gold and jewellery exporter, is also facing regulatory scrutiny. The Securities and Exchange Board of India (SEBI) alleged large-scale financial misrepresentation, non-cooperation with investigators and possible inflation of the company’s reported revenues.
In a 109-page interim order issued on June 3, SEBI said its investigation and forensic review found prima facie evidence that around 97% to 99% of the company’s reported revenue may have been inflated. SEBI described the findings as serious.
SEBI Restricts Rajesh Mehta
SEBI has also restricted Rajesh Mehta from buying, selling or dealing in securities of Rajesh Exports until further orders.
Canara Bank Had First Charge on Properties
Canara Bank was the largest creditor of Rajesh Exports. The bank had the first charge over land and properties worth around ₹400 crore in and around Bengaluru. It also had a charge over the company’s inventory and receivables, which were estimated at around ₹4,000 crore in 2023.
