Bank of Baroda to move HC over BR Shetty’s assets

MUMBAI: State-run Bank of Baroda (BOB) plans to approach the Karnataka high court to restrain billionaire businessman BR Shetty from selling his assets, even those that are not pledged to the bank, said two people aware of the development.

“The borrower’s loans with BOB are all standard at the moment and the lender has moved court only as a proactive step to ensure that its right to recovery is protected in case the borrower defaults later,” one of the people cited above said requesting anonymity. As Shetty gave a personal guarantee on these loans, BOB believes that all his assets should be part of the injunction, this person said.

The bank had earlier sought a similar injunction from a sessions court in Bengaluru.

The court offered partial relief and barred Shetty and his wife from selling or transferring only the 16 properties used as collateral for securing loans of ₹1,912 crore from BOB.

“The present exercise is mostly aimed at securing the interest of the lender. The bank now wants to bar Shetty from liquidating any of his assets and has to convince the court that the borrower might liquidate these assets, affecting the recoverability of the loans,” said Punit Dutt Tyagi, executive partner at Lakshmikumaran and Sridharan Attorneys.

Other lenders to Shetty plan to join BOB in efforts to recover loans, said the two people cited above.

Union Bank of India, for instance, also has exposure to Shetty’s companies, but its outstanding loans could not be immediately ascertained.

BOB had, in the lower court, sought an injunction on sale of all movable properties, shares, MFS, funds deposited in bank accounts and FDS of Shetty, according to documents reviewed by Mint. Banks are expecting a surge in bad loans as economic activity has ground to a standstill because of the stringent lockdown for nearly two months. Curbs are now being gradually lifted.