EOW plans to dispose off Rs 3,500cr HDIL collaterals
The Economic Offences Wing (EOW) of the Mumbai police, which is investigating the Rs 4,355 crore scam in the Punjab and Maharashtra CoOperative (PMC) bank, is planning to dispose off the Rs 3,500 crore worth collaterals pledged by HDIL affiliates for infusing liquidity into the bank.
A top Mumbai police official told the Free Press Journal on Tuesday that the EOW has written to JB Bhoria, the Reserve Bank of India (RBI)appointed administrator in the PMC who is presently conducting an inspection of the bank, to help facilitate the process of releasing the collateral for auction.
The pledged collateral, mostly in the form of land records, had been found by the EOW during a search of the PMC's central office at Bhandup (w) after the Mumbai police registered an FIR in the multi-crore fraud, chiefly perpetrated by the Rakesh and Sarang Wadhwan promoted HDIL group. The properties, in land parcels, are scattered in and around Mumbai and were estimated to be of Rs 3,500 crore worth.
The collaterals had been kept as mortgage by the Wadhwans against an estimated borrowal of Rs. 6,600 crore over a period of 9 years, the official added. "We know it's a very cumbersome and complex process to initiate the auctioning process after getting clearance from various agencies. But that should not stop us from initiating the process. The money raised through the auction would not only help the depositors, but make the bank stand on its feet again with substantial funds in the coffers," the official said adding, "the delay in selling off the properties would cause fall in their market value."
Meanwhile, advocate Hiten Venegaonkar said that the final decision for auctioning the collateral is the court's prerogative. "The police has to make a plea before the court which will decide the matter after hearing both the sides – police as well as the accused. The process can be expedited in a couple of months," said Venegaonkar who is a special counsel for the Union government.
On Monday, the RBI had raised the withdrawal cap for depositors in the bank to Rs 40,000.
Meanwhile, EOW sources said that the agency is likely to make a series of arrests in the coming days in connection with the fraud. The suspects include a group of bank officials, considered close to the arrested Managing Director (MD) Joy Thomas, who were involved in releasing drafts to HDIL without obtaining the necessary permissions from the bank's management. As per law, loans can't be disbursed by a co-operative bank without the prior approval of the chairman and the management. While chairman Waryam Singh happened to be one of the architects of the loot, the management had been kept in the dark.
"They (the employees) should have followed the quid pro quo and brought the fraud to the notice of the management," sources said while advancing reasons for their imminent arrest.
The collaterals had been kept as mortgage by the Wadhwans against an estimated borrowal of Rs 6,600 crore over a period of 9 years, the official added.