ED files charge sheet against Wadhawans in ₹4,355 cr. scam

The Enforcement Directorate (ED) on Monday filed a charge sheet before the Prevention of Money Laundering Act court against Housing Development Infrastructure Limited (HDIL) promoters Rakesh Wadhawan and son Sarang for their alleged role in the ₹4,355 crore Punjab and Maharashtra Cooperative (PMC) Bank scam.

The Economic Offences Wing (EOW) had registered an FIR on September 30 against former directors of PMC Bank — Joy Thomas and Waryam Singh — and the father-son duo. They were all charged with Sections 406 (punishment for criminal breach of trust), 409 (criminal breach of trust by public servant, or by banker, merchant or agent), 420 (cheating and dishonestly inducing delivery of property), 465 (punishment for forgery), 467 (forgery of valuable security, will, etc.), and 471 (using as genuine a forged document or electronic record) of the Indian Penal Code. The charge sheet, which runs into approximately 7,000 pages, said, “It is alleged that between 2008 and August 2019, the managing director, board of directors, bank officials of PMC Bank, and other unknown persons along with promoters and executives of HDIL committed various acts of criminal conspiracy by disbursing loans in a fraudulent manner and falsified the account books and thus, committed offence of cheating, forgery etc. They have caused wrongful loss to the bank and the depositors of ₹ 4,355 crore as fraudulent disbursements.”

The charge sheet further said, “The EOW had contended that PMC Bank in utter disregard to the Banking Regulation Act and the Reserve Bank of India (RBI) guidelines, failed to disclose the true picture in its regulatory reporting to the RBI by understanding the actual exposure of certain bad loan accounts which otherwise in the normal course should have been disclosed and classified as non-performing assets as per the RBI norms. This was done with a malafide intention.”

It also pointed out, “The accused along with other bank officials falsified books of PMC Bank and fraudulently replaced 44 loan accounts whose individuals balance outstanding was significantly higher (principal outstanding + interest outstanding) with 21,049 fictitious loans whose individual balance outstanding was comparatively lower. These accounts were not created in the core banking solution of PMC Bank, instead were mere entries in the advances master indent submitted to the RBI for the purpose of conducting their inspection for the year ending March 31, 2018. Thus, they camouflaged the actual loan accounts of the defaulting borrowers to the detriment of the bank and depositor’s interest at large.”

The charge sheet said, “It prima facie appears that the accused arrested by the EOW have played a key role in the execution of illegal transactions as alleged in the FIR and have actively participated in generation of proceeds from criminal activity to scheduled offences. It also appears that they are the actual beneficiaries of the proceeds of crime.”

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Printable version | Apr 8, 2020 2:14:01 AM |

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