Former State Bank of India (SBI) chairman Pratip Chaudhari was on Monday sent to 14-day judicial custody after his arrest for an alleged fraud involving the sale of a hotel when the company defaulted on a loan.
The Chief Judicial Magistrate's court rejected his bail plea.
"We have presented former SBI chairman Pratip Chaudhari before the court from where he was sent to judicial custody today," Jaisalmer Sadar SHO Karan Singh said.
Garh Rajwada', a hotel project in Jaisalmer, was financed by the bank in 2007, the SBI said in a statement. The project remained incomplete for over three years and the account slipped into a non-performing asset (NPA) in 2010, it stated.
Police said a case was registered against Chaudhari in 2015 for allegedly seizing the premier hotel property in the loan settlement case and selling it at a throwaway price through fraudulent means to an asset reconstruction company (ARC).
They said Chaudhari later joined as a director of the board of the company that had bought the hotel.
In its statement, the SBI said that all due process was followed while making the sale. The bank claimed that the court does not appear to have been briefed correctly on the sequence of events.
It said that SBI was not a party to the case and there was no occasion for the views of the bank being heard as part of the proceedings in court.
The bank has already offered its cooperation with law enforcement and judicial authorities and will provide further information, if required, the statement said.
All the directors of the ARC, including Chaudhuri, who joined their board in 2014, have been named in the case, SBI said. He had retired from the bank's service in September 2013, the statement added.