HDIL promoters Rakesh, Sarang Wadhawan booked in fresh cheating case

The police have booked Housing Development Infrastructure Limited (HDIL) promoter Rakesh Wadhawan and his son Sarang Wadhawan on charges of cheating a marketing company of ₹88

The police have booked Housing Development Infrastructure Limited (HDIL) promoter Rakesh Wadhawan and his son Sarang Wadhawan on charges of cheating a marketing company of ₹88.47 crore.

Mumbai, India - October 4, 2019: Rakesh Wadhwan produced at Killa Court by EOW in Mumbai, India, on Friday, October 4, 2019. (Photo by Anshuman Poyrekar/ Hindustan Times) (Hindustan Times)

Between February 2014 and July 2018, Mack Star Marketing Private Limited, a joint venture between HDIL and Mauritius-based Ocean Deity Investment Holdings Limited (ODIL), set up a business park, Kaledonia, in Andheri East. The Wadhawans are accused of unlawfully selling off eight office units from the project while keeping the partners in the dark.

Based on a complaint lodged by Sumeet Shah, managing director of Mack Star, a case was registered against the Wadhawans, HDIL nominees on the joint venture - Vyankatvardhan Iyenger and Waryam Singh Arora, former chairman of PMC Bank -, and five others at NM Joshi Marg police station on Tuesday. The five include the buyers of the units.

The police have invoked section 409 (criminal breach of trust by public servant, or banker, or merchant or agent), 420 (cheating), 423 (dishonest or fraudulent execution of deed of transfer containing false statement of consideration), 120 B (criminal conspiracy), and 34 (common intention) of the Indian Penal Code against them.

The case was later transferred to the Economic Offences Wing of Mumbai police.

As per the complaint, since ODIL had invested 95% of the funds in Mack Star for Kaledonia, the firm was given the controlling rights over the property, sale of assets, and sale proceeds as well.

“This article of association of Mack Star prohibited its directors-shareholders from selling assets, creating a mortgage or taking loans of more than ₹20 lakh without ODIL’s consent. But the Wadhwans allegedly misused their position in Mack Star and through Iyenger and Arora allegedly sold off eight office units in Kaledonia while keeping ODIL in the dark. This caused a wrongful loss of ₹88.47 crore to ODIL,” the complaint said.

The Wadhwans have already been in jail since 2019 in the ₹6,670-crore fraud at PMC (Punjab and Maharashtra Cooperative) Bank. The fraud came to light after RBI in September 2019 conducted a special audit and found purported gross irregularities in disbursals made by the bank to HDIL and its group firms.