PMC Bank-HDIL loan fraud: Court issues proceedings against MD of Crystal Group of Companies

“Various documents, bank account statements prima facie reflect that Mukesh Doshi was instrumental in paving the way for diverting ₹233 crore from HDIL Group of Companies which were under the control of Rakesh Kumar Wadhawan and Sarang Wadhawan during 2011 to 2012,” the special PMLA judge MG Deshpande said in the order issuing proceedings against Doshi. Issuance of the process marks the beginning of the criminal proceeding

Mumbai: The special PMLA court on Monday issued proceedings against businessman Mukesh Doshi, the chairman and managing director of Crystal Group of Companies, for allegedly helping in diverting ₹233 crore from Housing Development and Infrastructure Ltd (HDIL) promoted by Rakesh Kumar Wadhawan and his son Sarang Wadhawan. They claimed to project the transfer of money as regular business transactions, but the court said it was not supported by documents.

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“Various documents, bank account statements prima facie reflect that Mukesh Doshi was instrumental in paving the way for diverting ₹233 crore from HDIL Group of Companies which were under the control of Rakesh Kumar Wadhawan and Sarang Wadhawan during 2011 to 2012,” the special PMLA judge MG Deshpande said in the order issuing proceedings against Doshi. Issuance of the process marks the beginning of the criminal proceeding.

Doshi has been asked to appear before the court on July 10.

The order stated that the material produced by the Enforcement Directorate (ED) along with their prosecution complaint or chargesheet demonstrated that Mukesh Doshi had connived with the Wadhawans and all of them managed to divert funds of ₹233 crore from HDIL group companies into companies of Crystal Group. The court also noted that while doing so, Mukesh Doshi had claimed that it was as per a mutual arrangement between him and Rakesh Kumar Wadhawan, due to which such funds were transferred to him for investment, without recording any valid agreement.

The ED last month filed a complaint against Doshi and Crystal Group of Companies, which included M/s Aryaman Developers Pvt. Ltd., Fleabane Builders & Developers Pvt. Ltd., Nightshade Developers Pvt. Ltd, Star Cluster Realtors Pvt Ltd, Aquatic Builders Pvt. Ltd, Lakevilla Housing Developers Pvt. Ltd, Quiescent Builders Pvt. Ltd, etc.

HDIL promoters were already arrested in connection with the ₹6,670 crore fraud at Punjab and Maharashtra Cooperative (PMC) Bank.

Investigation into the case has revealed that despite default in payment, HDIL group companies availed loans from PMC Bank from time to time. Rakesh and other promoters of HDIL fraudulently utilised the funds taken from PMC Bank in various projects. ED has initiated a money laundering probe into the fraud after the Economic Offences Wing (EOW) of the Mumbai police registered a case against Wadhawans, PMC Bank officials and others.

In the further probe on the money trail of the loan amount, ED claimed to have found that Doshi through his firms helped the Wadhawans divert the funds. “Though the transactions relating to the flow of money are projected as genuine business deals, the same is not supported with any valid documents to justify the same,” the court said.