Waryam Singh: The Man in Middle of PMC Bank-HDIL Muddle
On Tuesday, 24 September, the Reserve Bank of India (RBI) imposed restrictions on Punjab and Maharashtra Co-operative Bank but did not mention any specific fault-line.
However, soon after, reports suggested the crisis is rooted to loans extended by the PMC Bank which turned into NPAs.
Another couple of days down the line, a certain S Waryam Singh has emerged as someone who has had his fingers in both pies: PMC Bank, and Housing Development & Infrastructure (HDIL), the real estate firm which received the loans that turned sour.
Waryam Singh got appointed as the chairman of PMC Bank in January 2015 for a period of five years. This was, in fact, Singh’s second stint as the chairman of the lender. He had held the office previously from 1999 to 2005.
While Singh did not serve PMC Bank and HDIL simultaneously at any point, according to a Business Standard report, Singh held 1.91 percent stake in HDIL till 2017, two years into his tenure at the beleaguered lender.
The Befuddling Rs 96.50 Crore Loan
Earlier this year, Bank of India took HDIL to the Mumbai Bench of National Company Law Tribunal (NCLT) after the real estate firm failed to repay dues worth Rs 522 crore. The NCLT on 20 August admitted HDIL under the provisions of the Insolvency Bankruptcy Code.
Following this, HDIL challenged the NCLT order in the National Company Law Appellate Tribunal.
The fresh loan extended by PMC Bank was seemingly a bad financial move, given the fact that HDIL was already facing an insolvency case.
Waryam’s Extended Links
Waryam Singh's link with HDIL isn't a one-off thing, and documentary evidence suggests that his association extends to other branches of the Wadhawan Group, which owns the real estate firm.
Singh's appointment in the two organisation's top posts also reveal the cracks in the framework of the RBI and other regulators in detecting a potential conflict of interest.
(With inputs from Business Standard, Indian Express and Moneylife.in)
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