Refuting reports suggesting that a Rs 750 crore fraud case was registered against Edelweiss, the financial services firm shared a list of complete facts on Sunday. The matter relates to reports suggesting that the Mumbai police force’s Economic Offences Wing (EOW) had registered a case against the financial services group Edelweiss along with more than a dozen of its associate firms for allegedly conspiring and defrauding investors of Rs 750 crore. The case was filed by real estate developer Ecstasy Realty in February, based on a complaint alleging serious financial offences including collusion and misappropriation of funds.
Edelweiss Financial Services said that being a listed company, it remains committed to protecting shareholder value. “We will pursue all legal avenues to recover our outstanding dues. We have encountered such tactics before — where defaulters attempt to weaponize public platforms and misuse the legal system to evade financial responsibilities…This has become a common playbook for defaulting borrowers seeking to stall enforcement actions,” read the statement.
Edelweiss Financial Services listed six main points in its March 16 statement, as summarised below:
1. No mention of Rs 750 crore fraud anywhere: Edelweiss
Strongly dismissing media reports suggesting that the case filed against the Edelweiss group was over a fraud, Edelweiss categorically wrote that there was no mention of a Rs 750 crore fraud anywhere including the complaint and the FIR.
2. Ecstasy Realty is a defaulting borrower…: Edelweiss
As of December 31, 2024, Ecstasy owes about Rs 1,683 crore to Edelweiss Asset Reconstruction Company Limited (EARC), including Rs 480 crore of principal overdues plus interest and other charges under NCDs. The dispute is purely civil in nature and has been pending before the Bombay High Court since 2022. Ecstasy sought reliefs similar to the FIR contents. However, the Bombay High Court denied interim relief on September 13, 2022.
3. Ecstasy is facing multiple legal proceedings due to financial defaults…: Edelweiss
Ecstasy Realty is already facing multiple legal proceedings due to its financial defaults, said Edelweiss, adding: “The matter is purely a civil dispute, already under litigation in multiple forums.”
The pngoing litigation against Ecstasy includes commercial civil suits in the Bombay High Court, insolvency proceedings in NCLAT, a recovery suit before the DRT/DRAT, cheque bounce cases in the sessions and metropolitan magistrate courts, and a preliminary enquiry against Ecstasy by the Economic Offences Wing, according to Edelweiss.
“The Parthenon Project’s implementation was delayed due to a failure to obtain the occupation certificate (OC) for Phase 1 and sluggish sales. Despite multiple efforts by EARC to resolve the matter, Ecstasy and its promoters did not engage in resolution talks and instead continued resorting to litigation,” it added.
The financial services firm said it remains committed to pursuing all legal remedies to recover its dues under the provisions of law.
4. Edelweiss subscribed to NCDs in March 2018 and disbursed Rs 600 crore: Edelweiss
Ecstasy failed to meet key project milestones, including obtaining the OC for Phase I of the Parthenon Project in Andheri, despite committing to do so before May 2018, which severely impacted project liquidity and led to sluggish sales, according to Edelweiss.
Edelweiss said it provided financial support by purchasing 16 apartments for approximately Rs 127 crore and later collectively sold them for approximately Rs 134 crore. “All transactions were executed transparently via registered sale deeds and allegations of impropriety are completely baseless,” according to Edelweiss.
5. Ecstasy’s interest rate was increased from 14 per cent to 15 per cent in March 2018 due to its lower credit rating: Edelweiss
In March 2018, the interest rate offered to Ecstasy was increased from 14 per cent to 15 per cent due to the latter’s lower credit rating, as documented in an Amendment to the Debenture Trust Deed. The rate was further revised to 16.25 per cent in 2019, a change communicated by the Catalyst Trusteeship Limited (CTL), the debenture trustee, to which Ecstasy did not object.
According to Edelweiss, these adjustments were legitimate business decisions based on financial risk assessments. “While Ecstasy continued making payments at the revised interest rate until March 2022, it contested the same, only after being declared a defaulter,” it added.
6. Rs 61.68 crore ‘siphoning’ claim baseless, lacks evidence: Edelweiss
Edelweiss said that Ecstasy’s FIR does not clarify how this amount was determined. “Edelweiss is the lender/creditor, not the borrower—Ecstasy owes money to Edelweiss, not the other way around. All financial transactions have been conducted transparently and in compliance with regulatory norms, ensuring adherence to the highest standards of governance,” noted the financial services firm.
Edelweiss Financial Services Shares
On Thursday, Edelweiss Financial Services shares slipped into the red after briefly making a mildly positive start to the day.
At 12:30 pm, the stock was down 0.9 per cent at Rs 89 apiece on BSE. However, it was more than 2.0 per cent higher for the week.
At these levels, Edelweiss shares have grown about 38 per cent in a year, outperforming a 5.7 per cent rise in the headline Nifty 50 index.
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