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Hyatt Regency row: 2 directors quit Asian Hotels (West); cite funds crunch, atmosphere of hostility

BusinessToday.In     June 10, 2021

Two independent directors have resigned from Asian Hotels (West), the Hyatt Regency Mumbai and JW Marriott Delhi Aerocity owner, amid the fund crunch crisis at the hotel, which ceased operations this week. These directors Raj Kumar Bhargava and Lalit Bhasin have cited refusal by chairperson to convene a board meeting in wake of the financial crisis in the company as the reason for their resignation.

"I have resigned as the hotel run by Asian Hotel has stopped functioning due to lack of finances with no funds coming from the promoters, I do not see any future. Also, despite repeated requests, the chairperson did not respond to a discussion on the financial problems of the company. As such, my usefulness to the company is no longer seen," Bhargava said in his resignation mail.

Bhargava and Bhasin said, "no funds" from promoters and an "atmosphere of hostility" at the company have forced them to resign. Bhasin said the company is in "default of not only repayment of bank loans but also of statutory dues". He stated that no remedial steps have been taken to meet the financial disaster it is facing despite repeated requests and directions of the audit committee and the independent directors. He added that there's an atmosphere of hostility among the promoters and he did not wish to remain part of such an environment any longer.

The company has informed the stock exchanges about their resignation. Asian Hotels (West) on Wednesday said in a regulatory filing that the company defaulted Yes Bank's due instalment on April 28 due to the massive COVID-19 effect.

"Since then, Yes bank has held all funds, including daily hotel collections in the escrow account and the company/hotel are not allowed to make any payment, including government taxes (like GST, VAT, TDS, PF, ESIC, etc), vendors payments, on roll employees' salaries (more than 300 hotel and corporate employees) and other critical hotel services from the said account," the company said.

Yes Bank, however, has made some payments from the company's escrow account towards the hotel's electricity, water and gas charges.

Hyatt Regency Mumbai "temporarily" suspended its operations after receiving no funds from Asian Hotels (West). The hotel will remain closed until further notice, and future reservations through Hyatt booking channels will remain temporarily unavailable, a statement said.

Also read: Hyatt Regency Mumbai temporarily suspends operations amid fund crunch

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