BackTwo HDIL directors held in PMC Bank scam; properties worth ₹3,500 cr attached
Rakesh Wadhawan and his son Sarang Wadhawan, accused of loan default, have been arrested by the Economic Offences WingFormer Mumbai MP Kirit Somaiya added that EOW will also arrest PMC Bank's former chairman Waryam Singh and former MD Joy Thomas
PremiumMumbai police on Thursday arrested two directors of the Housing Development Infrastructure Limited (HDIL) in the PMC Bank scam, a senior official said.
Rakesh Wadhawan and his son Sarang Wadhawan, accused of loan default, have been arrested by the Economic Offences Wing (EOW), the official said.
Properties worth ₹3,500 crore of HDIL have also been frozen by the EOW, he said. "We arrested the two directors of HDIL after a detailed interrogation," the official said.
HDIL is embroiled in the crisis at Punjab and Maharashtra Cooperative (PMC) Bank, which has extended substantial amount of loans to the company. Press Trust of India had earlier reported that the corporate affairs ministry has started an inspection of the books of accounts of realty firm HDIL, which has been unable to meet its debt obligations for quite sometime.
The BJP Maharashtra Vice President and former Mumbai MP Kirit Somaiya added that EOW will also arrest PMC Bank's former chairman Waryam Singh and former MD Joy Thomas.
Incorporated in 1996, Mumbai-based HDIL mainly focused on real estate development in the Mumbai Metropolitan Region, which included clearing slum land and rehabilitating slum dwellers.
The PMC Bank crisis has also sparked renewed concerns about the health of banking sector.
The RBI has barred the Mumbai-based urban cooperative bank from renewing or granting any loans or making investments without prior approval of the central bank, while depositors can only withdraw a maximum of ₹10,000 from their PMC Bank accounts over the next six months. The Economic Offences Wing of Mumbai Police on Monday has filed a complaint, accusing the bank's management of concealing non-performing assets.
The FIR was filed against HDIL, and Punjab & Maharashtra Cooperative (PMC) Bank officials, including suspended MD Joy Thomas in PMC bank fraud case. EOW has formed a Special Investigation Team (SIT) to probe the matter.
The FIR alleged possible fraud and wrongful loss of ₹4,355 crore and charges of cheating against HDIL.
"Joy Thomas and board members did not paint a true picture to RBI. PMC Bank board held back information on NPAs deliberately," the FIR stated.
Last week, the RBI barred the Punjab & Maharashtra Cooperative Bank Ltd (PMC), Mumbai from carrying out the majority of its routine business transactions for a period of six months, sparking panic among the depositors and sending shockwaves in the city banking and business circles on Tuesday.
In a letter to RBI, Thomas admitted large-scale wrongdoing and the cover-up exercise.
"Some of the large accounts were not reported to RBI from 2008 because of fear of reputational risk," Thomas has revealed in his letter.
He said that in 2011, the size of the bank was around 57 branches with deposits of ₹2,824 crore and advances of ₹2,000 crore. The exposure of HDIL group was then ₹1,026 crore. "Had we classified them as non-performing assets, we would have to stop charging interest on these accounts and we could have made losses. The growth part of the bank would have got hampered."
Thomas, however, said that the bank is still optimistic about the repayment plan of HDIL group and the group always promised to clear the dues and gave backup security to back their loans. The letter further said: "Every year during the course of RBI inspection we undergo a lot of stress due to concealment of information from RBI. It was worrying each of us."
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