HDIL directors held in PMC Bank case

ALLEGED IRREGULARITIES RK Wadhawan, his son Sarang interrogated, properties worth ₹3,500 crore provisionally attached

MUMBAI:The Economic Offences Wing (EOW) of Mumbai police on Thursday arrested Housing Development Infrastructure Limited (HDIL) director Rakesh Kumar Wadhawan and his son Sarang Wadhawan in the case of suspected financial irregularities at Punjab and Maharashtra Co-operative (PMC) Bank.

The EOW has also provisionally attached properties worth ₹3,500 crore that include land parcels, and residential and commercial premises of HDIL.

The Wadhawans were called to the EOW’s office on Thursday morning following which they were questioned in detail over loans they had taken unlawfully. They were placed under arrest in the afternoon after failing to give satisfactory replies to the questions, people aware of the development said on condition of anonymity.

Joint commissioner of police (EOW) Rajvardhan Sinha confirmed the arrests.

An initial probe by the Reserve Bank of India revealed that directors of PMC Bank, in connivance with others, had replaced 44 suspicious loan accounts with 20,149 fictitious bank accounts whose individual balances were low, EOW officials said.

According to the agency, the 44 borrower accounts allegedly linked to HDIL were masked by tampering with bank software.

Only a chosen few employees allegedly close to PMC bank’s former managing director Joy Thomas were in know of these bank accounts, said the EOW officials, who requested anonymity.

The agency has identified the people who had access to the accounts.

“These accounts were reflecting large amounts of loans acquired by HDIL and were masked with a special password,” said a high-ranking official. “Other employees would not be able to check details of these accounts, which were hidden.”

The agency has collected documents of the properties which have been provisionally attached. The provisional attachment will have to be confirmed by a competent court. “These properties have not been kept as collateral with any other bank other than PMC,” said the officer. “We are, however, in process of checking the papers...if there is any encumbrance on these properties.”

In a related development, the agency searched properties linked to PMC chairman Waryam Singh, named an accused in the first information report, and has stumbled upon a demat account of his with a notional value of ₹100 crore.

The EOW has also appointed a forensic auditor in the case. A forensic audit is a detailed examination of a company’s financial records that can be used as evidence in a court of law.

The agency pasted a notice on Thomas’s residence asking him to join the investigation. “Till date, we have received no response from his (Thomas’s) side. We have frozen his bank account and his properties have been identified,” said the officer cited above.

HDIL accounted for nearly 73% of the bank’s total loan book. Out of the ₹4,355.46 crore of loans under the scanner, around ₹2,145.78 crore were transferred to accounts held by the Wadhawans. An account belonging to Rakesh Kumar Wadhawan had a balance of ₹2,008.62 crore on August 31, 2019, according to the FIR.

The father-son duo will be produced before a special court on Friday.

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These accounts [44 suspicious accounts] were reflecting large amounts of loans acquired by HDIL and were masked with a special password. Other employees would not be able to check details of these accounts, which were hidden.

AN EOW OFFICIAL