PMC Bank fraud: Court allows sale of Wadhawans’ yacht, two aircraft

RBI-appointed administrator to oversee sale; proceeds to go towards loan payment

A magistrate court has granted permission to the administrator of Punjab and Maharashtra Co-operative (PMC) Bank to sell a yacht and two aircraft owned by Rakesh and Sarang Wadhawan, the prime accused in the ₹4,855-crore scam at the bank. The Wadhawans are the promoters of the now-bankrupt Housing Development and Infrastructure Limited (HDIL), which defaulted on loan repayments to PMC Bank. The court directed that earnings from the sales should be credited to HDIL’s loan accounts.

HT Image

PMC Bank has been managed by an administrator appointed by the Reserve Bank of India (RBI) since September, when the central bank learnt that over 73% of the bank’s loan exposure was to HDIL. “Due to restrictions of the Reserve Bank of India, they [account holders] cannot withdraw their amount more than allowed by the RBI. If this amount, by selling the properties, came to the loan account of accused, it would be helpful to the account holders to some extent,” observed the magistrate court on November 25, while allowing the sale of the yacht and aircraft attached by the economic offences wing (EOW) of the Mumbai Police.

The court order was hearing a plea by the RBI-appointed administrator for the sale of one yacht, two aircraft and 14 vehicles that are not mortgaged with PMC Bank but are owned by either HDIL or the Wadhawans. The plea pointed out that the value of these assets may depreciate if there is a delay and that proceeds of the sale would be adjusted against HDIL’s outstanding dues at PMC Bank. The Wadhawans have consented to the sale.

Appearing for the ED, advocate Kavita Patil said the agency had no objection to the sale of the yacht and aircraft, which were attached by the EOW. So far, the EOW has attached properties whose estimated value is around ₹4,000 crore.