PMC Bank fraud: Supplementary charge sheet alleges conspiracy

There was a deep-rooted conspiracy in the ₹6,670 crore PMC Bank fraud case and the board of directors, who flouted the basic Reserve Bank of India (RBI) guidelines

There was a deep-rooted conspiracy in the ₹6,670 crore PMC Bank fraud case and the board of directors, who flouted the basic Reserve Bank of India (RBI) guidelines were guilty of wilful omission and commission, revealed a supplementary charge sheet filed last week by the Economic Offences Wing (EOW) at the Esplanade court.

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The charge sheet which is based on the forensic audit report, said the bank’s auditors, chairperson Waryam Singh, and Housing Development Infrastructure Limited (HDIL) promoters- Rakesh Wadhwan and Sarang Wadhwan- had old ties which were exploited for carrying out the fraud.

On February 5, the EOW filed a supplementary charge sheet against the bank’s former board of directors - Rajneet Singh, (son of former BJP MLA Sardar Tara Singh), Jagdish Mookhey, Trupti Bane and Mukti Bavisi and statutory auditors, Jayesh Sanghani and Ketan Lakdawala and concurrent auditor Anita Kirdat.

The charge sheet states that the loan facilities extended to the HDIL group of companies was “frequently discussed” and sanctioned with the “majority of votes” in board meetings and that the directors “did not care to look into the loan facilities”.

The charge sheet revealed that in the financial year 2007-08, the RBI levied a fine of Rs 5 lakh on PMC bank for six violations including the grant of unsecured loans of Rs 10 crore and window-dressing of the balance sheet.

“Thus based on the above facts, the RBI had already raised red flags for multiple irregularities in the operation of PMC bank but the BODs never discussed these irregularities. Hence, wilful omission and commission (was) done by them,” stated EOW in the charge sheet.