First from the depositors of Oriental Cooperative, and now from the buyers of Vegas City apartments, Sudhir Basnet, one of the major players in the domestic realty sector, is under mounting pressure.

On Saturday, those who had booked apartments at Vegas City, Imadole, first gathered at the project site to discuss the future course of action. They then rushed to Basnet’s residence in New Baneshwor, Kathmandu, but they could only meet his parents.

Basnet, who has promoted more than a dozen housing and apartment projects, has not completed most of them and people who had booked apartments/individual homes have become restless. With chances of completion of these projects looking slim, they have demanded that their money be returned along with interest.

Vegas City, being developed by Basnet’s Kohinoor Hill Housing, was launched in 2009. The company had promised to handover the property in two-three years, but construction has hardly made any progress. As per the plan, six blocks of apartments should have been errected, but not even two blocks have completed yet.

The victims have registered a ‘Vegas Users Management Committee’ to protect their rights. A total of 268 individuals have booked apartments at Vegas City, paying Rs 830 million.

One of the customers is Mohan Bhattarai from Biratnagar. He made a full payment of Rs 8.6 million two years ago from an individual home. “Not a sketch has been drawn so far on the land where the developer had promised to build a house within two and half years,” Bhattarai said.

Another victim Krishna Ranabhat of Balokot, Bhaktapur, shared a similar story. He had booked two apartments on 10th floor, but the construction is yet to reach to the floor. “Currently, my apartments are in the air,” said Ranabhat. He had paid an advance amount of Rs 2.4 million for apartments priced at Rs 6.4 million.

Members of ‘Vegas Users Management Committee’ say are ready to take over the project or sell it to an ‘appropriate party’ provided their money is returned back.

Besides Vegas City, other projects promoted by Basnet, including Kohinoor Hill House and Imperial Housing, are also yet to be completed.

Kiran Gopal Karanjit, former employee of the Nepal Rastra Bank, had booked an apartment at Imperial Housing four years ago making a full payment of Rs 3.9 million. “But now we have found that the same apartment has been sold to several buyers,” he said.

According to the customers, Basnet has informed them that he cannot complete the project and is searching for potential buyers.

Basnet is currently facing multiple problems in his business ventures, including real estate, airlines and cooperative. His Oriental Savings and Credit Cooperative owes Rs 3.89 billion to over 7,000 depositors.

Likewise, a consortium of banks that financed his Agni Air has asked him to repay the debt until mid-December or face foreclosure. The consortium consisting Grand Bank, Sunrise Bank and International Leasing and Finance Company has lent Rs 650 million to Agni Air.

According to fellow realty traders, Basnet’s woes began with the slowdown in the realty business . Basnet launched a series of projects when the sector was booming some three years ago. But his projects started to suffer after the market started to slow down due to multiple factors, including the central bank’s tightening on realty and housing loans, banks’ rising interest.

“His projects landed in crisis due to poor management,” said one of the realty traders. “He became over-ambitious and started dozens of projects, diverting funds from one to another.”

Basnet, however, has so far put on a brave face. On Tuesday, in front of around 600 depositors of Orietnal, Basnet assured them that he would not run away without paying his liabilities. He told them he would pay their deposits back after selling Vegas City and Imperial Apartment projects.

Prime Commercial Bank, which lent Rs 220 million to the Imperial project, said it was awaiting the sale. “We have been told that a Non-Resident Nepali is negotiating to purchase the project and we are awaiting the result,” said Sanjeev Manandhar, general manager of the bank. “If not sold, we will follow normal banking process,” said Manandhar.

source: The Kathmandu post,9 Dec 2012