Housing Development Infrastructure Limited (HDIL) Directors Sarang and Rakesh Wadhawan were on Friday, 4 October, sent to police custody till 9 October by Esplanade Court, ANI reported.
The two are accused of loan default in connection with the Punjab and Maharashtra Cooperative (PMC) Bank money laundering case and Mumbai Police’s Economic Offences Wing had arrested Rakesh and Sarang Wadhawan on Thursday.
Defence’s Arguments At Hearing
At the hearing on Friday, defence lawyer Advocate Amit Desai admitted that the defence was conscious of the extent of the alleged scam and stated that the primary issue at this stage is the interest of the depositors.
Desai also said that the Economic Offences Wing (EOW) was trying to imply non-cooperation by the Wadhawans by saying that they did not reveal details of their loans when they were called in for questioning.
However, according to Desai, since the scam surfaced, the Wadhawans were in communication with the RBI-appointed administrator in PMC. They had also offered to meet RBI administrator to explain their assets, liabilities and other details.
Talking about how there was an ongoing conversation about the sale of assets to attain liquidity and help the depositors, Desai claimed that the arrest of the Wadhawans had created a fear and tainted their properties. Desai further said that the value of these properties had depreciated.
Defending the Wadhawans, Desai told the court that his clients had voluntarily given their passports to EOW on Thursday before arrests, as well as having fully disclosed their loans in their balance sheets and books.
Speaking at the hearing, the EOW reiterated that 75 percent of the loans from the bank was given to HDIL alone. It also added that matters such as liquidation were to be looked after by the bank, pointing out that liquidation of assets was a matter of civil court while this was a criminal case.
First Arrest in PMC Case
The arrest of the Wadhawans is the first arrest made since an FIR was filed against the PMC Bank and HDIL’s senior management in connection to the Rs 4,335 crore scam.
Police sources confirmed that Rakesh Kumar and his son Sarang were brought in for questioning but, when they refused to cooperate with the investigation, they were arrested.
Properties worth Rs 3,500 crore of HDIL have also been frozen by the EOW.
Police Still On Lookout for Ex-PMC MD
Meanwhile, the police are still on the lookout for ex-PMC MD Joy Thomas. Former Bank Chairman Waryam Singh is yet to be arrested as well.
EOW has sent a notice to Joy Thomas at his residence, asking him to cooperate with the investigation but Thomas has been evading the cops for nearly four days now.
Joy Thomas’s son, who was questioned by the police, has also allegedly provided misleading information.
Sources in the EOW say Thomas’s son shared a wrong contact number when asked for his father’s phone number.
On tracking the number shared by Thomas’s son, the police allegedly found it to be that of an auto-rickshaw driver. The cops have been unable to trace Thomas so far.
HDIL Assets Worth Rs 3,500 Cr Provisionally Attached
The EOW also searched Waryam Singh’s residence on Thursday. Cracking down on the ex-PMC Bank chairman’s financials, the EOW has frozen a Rs 100 crore worth Demat account owned by Singh.
Sources say, properties worth Rs 3,500 belonging to HDIL have been provisionally attached by the EOW. This includes land parcels and residential and commercial projects.
Investigation based on the documents seized from PMC Bank has led the police to believe that these properties were mortgaged to PMC Bank. The EOW is continuing its probe to find out whether the same property was also mortgaged elsewhere.
The FIR registered by the police has listed 44 suspect borrowers who defaulted on their loans. While 10 of these accounts belong to HDIL and the Wadhawans, the rest 34 accounts have also found to be connected to the same group.
The 34 other accounts were found to have links with HDIL. Loans were taken from these accounts and the money was then transferred to HDIL and its proprietors.
How Were the Accounts Masked?
The 44 suspect accounts that have been mentioned in the FIR and were found to have direct and indirect links with the Wadhawans, were being allegedly masked by some of the bank employees who were close confidants of the accused.
Sources say, the EOW found that the bank software had been tampered with. These 44 accounts were masked with a special password. Only those who were in the know and had access to the password were able to view details of the accounts.
Bank staff are also being questioned by the police to ascertain more details on their involvement.
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