The State Bank of India (SBI), the country’s largest bank, has taken over two residential properties belonging to PC Jeweller Ltd. (PCJ) in New Delhi, after the jewellery firm failed to repay a loan of ₹1,168.90 crore. According to media reports, the bank has also filed a case against PCJ in the National Company Law Tribunal (NCLT) for recovery of its dues.
According to a public notice issued by SBI, the properties were mortgaged by PCJ and its guarantors as security for the loan. The bank warned the public not to deal with the properties, as they are subject to the bank’s charge of ₹1,267 crore, as well as the amount outstanding to other secured creditors.
PCJ, once a leading jewellery retailer in India, has been facing severe financial troubles since 2018, when its promoter and managing director Balram Garg was arrested by the Enforcement Directorate for alleged involvement in a bank fraud case. Since then, the company has defaulted on its loans from various banks, leading to legal actions and asset seizures.
In its latest quarterly results, PCJ reported a net loss of ₹152 crore and a steep decline in its domestic turnover, which dropped from ₹836 crore in the same period last year to ₹33 crore this year. The company attributed this to the disruptions in its operations and the liquidity squeeze resulting from the ongoing litigation with its lenders.
The company also stated that it has closed down 17 stores in the first half of this fiscal year, leaving it with 63 stores as of 30th September, 2023. Three of its stores in Delhi remain temporarily shut due to court proceedings. The company said it is exploring the possibility of an out-of-court settlement with its lenders and is in regular touch with them for the same.