Minister Jupally Krishna Rao’s sons default on SBI mortgage

HYDERABAD: Two sons of Telangana minister Jupally Krishna Rao have defaulted on a loan of over Rs 86 crore they took from (SBI). Now, the bank is struggling to recover the amount. Though SBI’s stressed assets management branch conducted an e-auction for mortgaged properties in March this year, the bank could get bids for only about Rs 2.2 crore and failed to realise even the loan amount.
According to officials, and Varun, two sons of the minister, floated a company Shaili Paradigm Infratech Pvt Ltd, along with a third partner Kiran Reddy Vasireddy. Arun was founder and managing director of the firm that acted as a service provider for irrigation projects and water & road projects in Telangana. Pledging their property as collateral security, the two sons borrowed over Rs 60 crore from SBI in 2013. Pledged properties included a four acre land in Kismatpur, five land parcels of three acres in Gagan Pahad in Rajendranagar and three flats in apartment complex in Ameerpet. Along with interest and other expenses, the loan amount in December 2017 touched Rs 86 crore.

In 2014, the company was sold to , an unlisted company headquartered in Hyderabad and the three partners in Shaili, including the two sons of Jupally acted as guarantor for the availed loan.

Account declared NPA in June 2014

However, since Kridhya did not repay, SBI in June 2014 declared the account as Non-Performing Asset (NPA) and issued a final demand notice to the Kridhya firm in December 2015. In October 2016, SBI issued notification for e-auction of properties pledged as collateral security for the loan, but the auction could not take place as the mortgaged property in Kismatpur gram panchayat limits was found to be entangled in a legal wrangle with few parties claiming right over the property. SBI sources said by auctioning the land parcel in Kismatpur, the bank hoped to recover at least 50% of the outstanding loan.

After dilly dallying for more than a year, the Stressed Assets Management branch of SBI once again conducted an auction in the second week of March 2018 for the rest of the properties, barring the land parcel in Kismatpur, and fixed Rs 17.5 crore as the reserve price. “We got seven bids for all properties that were put for eauction and the total bid amount received was Rs 2.2 crore. Three bidders, who quoted more than the reserve price, did not deposit the amount with the bank as they wanted to examine more documents pertaining to the title. We are providing them the same,” a senior SBI official told TOI.

Bank officials alleged that there were not many takers for the auction as the properties belonged to sons of a cabinet minister in the state government. “Besides, the loan was given liberally without considering the market value of properties pledged. It is only after the recent scams involving nationalised banks came to light they decided to go for the e-auction,” said the sources.

When ed, SBI’s authorised officer for the auction T Ajay Kumar admitted they received a lukewarm response for bids. “We are also considering approaching the (NCLT),” he said. Despite repeated attempts, minister Jupally Krishna Rao was not available for comment. Last week, he told TOI the issue pertains to his two sons. Two days ago, he said he was touring his assembly constituency and on Sunday, did not respond to calls.

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