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ED gets custody of Wadhawans till 22 October in PMC Bank case

Special PMLA court judge P. Rajvaidya sent Rakesh Wadhawan, HDIL’s chairman and managing director, and his son to ED custody till 22 October. (Aniruddha Chowdhury/Mint)Premium
Special PMLA court judge P. Rajvaidya sent Rakesh Wadhawan, HDIL’s chairman and managing director, and his son to ED custody till 22 October. (Aniruddha Chowdhury/Mint)

  • Another depositor of the bank died after his family failed to arrange for funds to pay for a heart surgery
  • Rakesh and Sarang Wadhawan were sent to ED custody in connection with the 4,355 crore PMC scam

The promoters of bankrupt Housing Development and Infrastructure Ltd (HDIL), Rakesh Wadhawan and his son Sarang were sent to Enforcement Directorate (ED) custody by a special court in connection with the 4,355 crore Punjab & Maharashtra Co-operative (PMC) Bank scam on Friday as a fourth depositor died.

The ED had initiated an investigation under the Prevention of Money Laundering Act (PMLA) on the basis of an FIR filed by the Economic Offences Wing (EOW)of the Mumbai Police. Earlier this month, the EOW had registered a case against the Wadhawans and top PMC Bank officials for their alleged role in the multi-crore scam, and subsequently arrested the accused.

Special PMLA court judge P. Rajvaidya sent Rakesh Wadhawan, HDIL’s chairman and managing director, and his son to ED custody till 22 October.

Following the court order, the probe agency took custody of the Wadhwans and brought them to the ED office for questioning, an official said.

The EOW had alleged that the bank management, in cahoots with the Wadhawans, had concealed information from the Reserve Bank of India about the huge loan defaults by HDIL group firms. The bank officials replaced 44 loan accounts of HDIL with 21,049 fictitious accounts to camouflage the loan defaults by the real estate group, EOW said. Besides the father-son duo, the police have arrested the bank’s former director Surjit Singh Arora, former managing director Joy Thomas and former chairman Waryam Singh.

On 16 October, Rakesh and Sarang Wadhawan wrote to the RBI, the finance ministry and the investigating agencies, seeking permission to sell their assets, which include a yacht, a Rolls Royce car and an aircraft, to pay off the bank’s dues.

Denying allegations of fraud and money laundering, the Wadhawans asked the central bank to “immediately take steps to sell the assets at a fair market value" so that they can start repaying the loans. However, these assets have already been seized by the ED. Meanwhile, an HDIL official said the real estate firm may hire property consultancy firm Knight Frank India to arrive at a valuation for the 40 land parcels securitized with PMC Bank. “There are 40 such properties from Vasai, Thane, Navi Mumbai, Kerela that have been securitized with the bank in years from 2010 to 2018," he said, requesting anonymity.

Meanwhile, a PMC Bank depositor, Murlidhar Dharra, 83, died on Friday after his family reportedly failed to arrange for funds to pay for a critical heart surgery.

This is the fourth death of a PMC bank depositor since RBI capped cash withdrawals at 40,000 for a six-month period, after the financial fraud in the bank came to light. Earlier, two people had died of cardiac arrests, while a doctor allegedly committed suicide.

A close relative of the deceased told PTI that Dharra required an urgent surgery, but the family could not arrange for funds from other sources. According to reports, the family of the deceased had deposits worth 80 lakh with the bank. On Tuesday, a former Jet Airways employee Sanjay Gulati, 51, who had lost his job following the grounding of the airline, died of a heart attack hours after attending a depositors’ protest. Dr Nivedita Bijlani allegedly committed suicide, while Mulund-resident Fatto Punjabi also died of cardiac arrest.


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