PMC ex-MD held, ED raids 6 places
Money-laundering case registered; HDIL directors, arrested on Thursday, sent to police custody till Oct 9
NEW DELHI: The Enforcement Directorate carried out raids (ED) on Friday after registering a money laundering case against Housing Development Infrastructure Limited (HDIL) executive chairman Rakesh Kumar Wadhawan and his son Sarang Wadhawan, and the Mumbai police’s Economic Offences Wing (EOW) arrested the Punjab and Maharashtra Cooperative (PMC) Bank’s suspended managing director in connection with the crisis at the bank.
Wadhawan and his son Sarang Wadhawan, and senior officials of PMC, were named in a complaint registered by the Mumbai police on Monday for causing losses of ₹4355.43 crore to the bank. The father-son duo were arrested by Mumbai police’s EOW on Thursday and produced before a local court in Mumbai on Friday. They have been sent to police custody till October 9.
Interestingly, it emerges that Delhi police investigated Wadhawan four years ago in a case of fraud and a Delhi court even summoned him as an accused in February last year along with promoters of Rudra Buildwell Realty Private Limited, namely Mukesh Khurana, Babita Khurana and Gautam Khurana.
The Delhi investigation was in connection with the suspected fraud by Rudra Buildwell, but the police chose to not name him in a charge sheet it filed in January this year. Several individuals had invested in Rudra’s Serra Bella/Pavo Real housing project in Indirapuram and paid booking amount to the developer but they were cheated as there was no development at the project site.
“We had recorded the statement” of Wadhawan, a Delhi police EOW officer said on condition of anonymity. “But there wasn’t enough evidence to sugconnection gest that he had a role to play in cheating the investors in Rudra Buildwell”.
On Friday, after registering a case of money laundering, ED teams carried out searches at six locations in Mumbai including residences and offices of the Wadhawans.
The ED’s case is based on the Mumbai EOW’s first information report (FIR) against the management of PMC Bank including former chairman Waryam Singh and suspended managing director Joy Thomas, who was arrested on Friday in with the irregularities at PMC Bank. Thomas was summoned to the EOW office at the Mumbai police headquarters and arrested after questioning, a police official said.
The Mumbai police EOW on Thursday also provisionally attached properties worth ₹3,500 crore that include land parcels, and residential commercial premises of HDIL.
The allegation is that PMC ran up losses of ₹4,355.43 crore since 2008 on loans given to HDIL in a fraud in which bank executives colluded with the company.
Despite defaults, the bank officials did not classify the loans as non- performing assets and intentionally hid information about the loans from the Reserve Bank of India (RBI), Mumbai police has claimed. Thomas is believed to have detailed all these in a five-page confessional letter sent to the Reserve Bank of India.
On September 23, RBI restricted activities of PMC bank for six months citing irregularities, suspended Thomas, and said depositors could withdraw a maximum of ₹1,000 from the bank. After the obvious outrage that followed -- the bank has 9 lakh depositors -- this amount was increased to ₹10,000 two days later and to ₹25,000 on Thursday.
An ED official familiar with the case said on condition of anonymity that investigators are looking for more details of assets of the Wadhawans and the others named in the complaint, and also their foreign transactions.
PMC Bank has 137 branches and over ₹11,000 crore in deposits. The ED officer cited above said the overall exposure of the bank to the financially stressed HDIL group is around ₹6,500 crore ,or over 73% of it advances, and claimed that the company is paying no interest on the entire amount.
THE ALLEGATION IS THAT PMC RAN UP LOSSES OF ₹4,355.43 CRORE SINCE 2008 ON LOANS GIVEN TO HDIL IN A FRAUD IN WHICH BANK EXECUTIVES COLLUDED WITH THE COMPANY