Housing Development Infrastructure Limited’s (HDIL) chairman Rakesh Kumar Wadhawan and his son, managing director Sarang Wadhawan, were on Friday been remanded to police custody till October 9 in the case connected to major financial irregularities at the Punjab and Maharashtra Co-operative (PMC) Bank.
‘Big magnitude scam’
The Economic Offences Wing (EOW), while seeking police custody of the two, said a detailed investigation was necessary considering the magnitude of the scam. The EOW said HDIL availed of 70% of depositors’ money as loans through 21,049 fictitious accounts.
HDIL's Rakesh Wadhawana and his son Sarang Wadhawan produced in Esplanade Court on Friday.
An initial investigation by the Reserve Bank of India revealed that directors of PMC Bank, in connivance with others, had replaced suspicious 44 loan accounts with 21,049 fictitious bank accounts whose individual balances were low.
According to the EOW, the banking software was tampered with to mask the 44 accounts allegedly linked with the HDIL, hiding them from the care banking system.
HDIL accounted for nearly 73% of the bank’s total loans. Out of the ₹4355.46 crore in loans under the scanner, ₹2145.78 crore was transferred to accounts held by Rakesh Kumar and his son. An account belonging to. Mr Kumar had a balance of ₹2008.62 crore on August 31, 2019, said the EOW officers.
Only a chosen few employees allegedly close to the bank’s former managing director Joy Thomas knew about these accounts.
The agency sought 14 days of their custody and said, “Initial scrutiny of financial statements indicated diversion and misappropriation of funds in large amounts and it requires to be interrogated with both accused in order to prevent a further financial catastrophe.”
Senior counsel Amit Desai who represented the Wadhawans, opposed police custody, saying his clients wanted to repay the money and that sending them to police custody will hamper the liquidation process as well as affect deposits.
‘Custody necessary’
Mr. Desai said 49 land parcels were lying with the bank, and that fixed deposits worth ₹158 crore were processed.
The additional chief magistrate at the Esplanade Court, however, deemed that custody interrogation of the Wadhawans was necessary.
