HDIL directors held in PMC Bank case

RK Wadhawan, his son Sarang interrogated, properties worth ₹3,500 crore provisionally attached.

Two directors of Housing Development Infrastructure Limited’s (HDIL), Rakesh Kumar Wadhawan and his son Sarang Wadhawan, were arrested on Thursday by the Economic Offences Wing (EOW) for their involvement in the case of financial irregularities at the Punjab and Maharashtra Co-operative (PMC) Bank case. The EOW has also provisionally attached property worth ₹3,500 crore. The duo will be produced before a court on Friday. The Wadhawans were called to the EOW’s office on Thursday morning and questioned on the matter of HDIL unlawfully availing loans from PMC Bank. HDIL accounted for nearly 73% of the bank’s total loan book. Out of the ₹4,355.46 crore loans under the scanner, around ₹2145.78 crore were transferred to accounts held by the Wadhawans. When the duo was unable to give satisfactory replies to the EOW, father and son were placed under arrest, said sources. Joint commissioner of police (EOW) Rajvardhan Sinha confirmed the arrests.

Two directors of Housing Development Infrastructure Limited’s (HDIL), Rakesh Kumar Wadhawan and his son Sarang Wadhawan, were arrested on Thursday.

The agency has also collected documents of properties, including land parcels as well as residential and commercial premises of HDIL, which have been provisionally attached.

“These properties have not been kept as collateral with any bank other than PMC,” said an EOW officer. “We are, however, in process of checking the papers.” The provisional attachment will have to be confirmed by a competent court.

In a related development, the agency conducted searches on properties linked to PMC chairman Waryam Singh, named as an accused in the FIR registered on Monday. A demat account of his has been found with a notional value of ₹100 crore.

An initial probe by the Reserve Bank of India (RBI) found that PMC Bank had replaced suspicious 44 loan accounts with 20,149 fictitious bank accounts whose individual balances were low. According to the EOW, the 44 accounts allegedly linked with HDIL were masked by tampering bank software, which left them virtually hidden from the core banking solution.

Only a chosen few employees – allegedly close to PMC Bank’s former managing director Joy Thomas – knew of these bank accounts, said EOW sources. “These accounts were reflecting large amounts of loans acquired by HDIL and were masked with a special password,” said an officer requesting anonymity. “Other employees would not be able to check details of these accounts which were hidden.”

Meanwhile, the agency has asked Thomas to join the investigation. “Till date, we have received no response from his [Thomas’s] side. We have frozen his bank account and his properties have been identified,” said the officer.