PMC Bank fraud: EOW names whistleblower, 14 other staffers as accused

Mumbai: Fifteen officials of the Punjab and Maharashtra Co-operative (PMC) Bank, including whistleblower Manbeer Singh, who was earlier named as a witness in the case, will be prosecuted for aiding and abetting the fraud that caused a loss of ₹6,155 crore to the lender

Mumbai: Fifteen officials of the Punjab and Maharashtra Co-operative (PMC) Bank, including whistleblower Manbeer Singh, who was earlier named as a witness in the case, will be prosecuted for aiding and abetting the fraud that caused a loss of ₹6,155 crore to the lender. The Economic Offences Wing (EOW) of the Mumbai police has named 15 bank employees as accused in the second charge sheet, based on their statements recorded before a metropolitan magistrate.

Manbeer Singh was said to have alerted the Reserve Bank of India (RBI), which then conducted a special audit and brought out the fraud in 2019. (REUTERS)

Charges are expected to be framed soon against a total of 44 accused, including 15 staff members. EOW has claimed that these 15 employees acted closely with the prime accused in the case -- then managing director Joy Thomas, then chairman Wariam Singh and others on the Board of Directors.

The EOW had in February this year filed a second charge sheet, adding 25 new accused in the case, including the 15 officers. EOW has claimed that after Thomas, joint general manager Manjit Kaur was second in command in the bank. The flow of instruction received from Thomas to Manjit was passed on to deputy general managers -- Geeta Singh, Karmen Rebello, Rebecca Solomon and Aarti Desai.

The agency claimed that the orders were executed by Kunal Oberoi, Kushaldeep Chahal, Santosh Gurav, Deepak Gawade, Yogesh Kokate and Siddhi Padawe. Besides this, EOW claimed that chief manager Manbeer, senior manager Sunil Karpe and his team members -- Suraj Dalvi and Subhash Golap -- too were involved in the fraud.

The agency had recorded statements of Manbeer, Dalvi, Kaur, Geeta, Rebello, Soloman before metropolitan magistrates to strengthen the prosecution case against the accused who were booked earlier.

“After examination of other PMC bank employees functioning as subordinates to above-accused persons, it is revealed that these employees cited as witnesses had played a major role along with the main accused persons,” the agency has said.

Manbeer Singh was said to have alerted the Reserve Bank of India (RBI), which then conducted a special audit and brought out the fraud in 2019. Naming Manbeer an accused in the case, EOW has claimed that “prior to visiting the RBI, he had withdrawn all his deposits from the bank and the act of whistleblowing can be taken as saving his own skin because of which he kept silent for years even after having a complete knowledge of the fraud.”

“PMC Bank employees through their various ranks and posts while carrying out their banking functions committed various acts of commission and omission and abetted the main accused persons, Managing Director Joy Thomas, which further served the interests of other main accused persons namely Waryam Singh, Chairman of the Bank and accused Directors on the Board of PMC Bank, Rakesh Kumar Wadhawan and Sarang Wadhawan, causing loss of the hard-earned money to lakhs of depositors,” EOW said in their second charge sheet.

EOW on September 30, 2019, registered an offence in connection with the purported fraud at the multi-state cooperative bank with 137 branches in six states. According to the RBI, PMC bank had masked 44 problematic loan accounts involving advances to the tune of ₹7,457.49 crore – mostly extended to Housing Development and Infrastructure Limited (HDIL) promoters Rakesh Wadhawan and Sarang Wadhawan, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

The bank had created 21,049 fictitious accounts to ensure its master data tallied with the loan disbursals of ₹7,457.49 crore, RBI has stated in an affidavit filed in response to some other petitions before the high court.

BOX: Cash disbursed without any records

The second and final charge sheet by EOW also revealed that one of the bank officers, Suraj Dalvi, who managed the centralized cash vault of the PMC Bank at the relevant time used to disburse cash directly from the vault on instructions of Joy Thomas and Manjit Kaur. The payments used to be made against cheques, but without maintaining any record of these transactions in the banking system. The charge sheet adds that in this manner, “Dalvi, and other managers like Sunil Karpe, and Subhash Gholap have paid to Rakesh Wadhwan and Waryam Singh and to Joy Thomas.”