The Enforcement Directorate (ED) probe in the Punjab and Maharashtra Cooperative (PMC) Bank scam has revealed that majority of loans borrowed from the cooperative bank by Housing Development and Infrastructure Ltd (HDIL) and group companies were used to settle other loans of the group companies.
Manjit Kaur Ishwar Singh, who was Joint General Manager (Credit) in PMC Bank, told ED during the probe that HDIL had around total 44 loan accounts which included personal accounts of the company's promoters Rakesh Wadhawan and Sarang Wadhawan.
Loans sanctioned to HDIL group companies by PMC Bank, Awas Developer's and Construction Pvt Ltd and Serveall Constructions Pvt Ltd, were utilised for settling the loan amount of another HDIL group company Mi Marathi Media Ltd, Singh told ED.
She added that another loan worth Rs 33 crore sanctioned to HDIL group company, Excel Arcade Pvt Ltd, was utilised to pay off the loan and liabilities of HDIL group company Privilege Industries Ltd. A loan of around Rs 200 crore was issued to Somerset Constructions PVT Ltd, a part of HDIL group, which was used for settling the liabilities and loans of group company Blue Star Realtors and a term loan of Rs 100 crore sanctioned by the bank to Excel Arcade Pvt Ltd (HDIL Company ) was used to clear the overdraft of Excel Arcade PVT Ltd which had an outstanding debit balance of Rs 30 crore.
Upon disbursement the debit stood at Rs 70 crore and from that Rs 33 crore were diverted for payment of a loan pending in the name of Privilege Industries Ltd. The balance overdraft of Rs 21 crore was transferred to Excel Term loan account.
On December 16, the ED had filed a 7,000 page charge sheet in connection with Rs 6,300 crore PMC Bank fraud case at the PMLA court, naming HDIL Promoters as main accused, while bank erstwhile chairman Waryam Singh, former managing director Joy Thomas, former director of the bank Surjit Singh Arora have been named as accused in the case. All the five accused are currently in judicial custody. Apart from these five, the Police has also arrested seven other bank officials, and the supplementary charge sheet will be filed against them later.
The probe revealed that there were two types of accounts operational in PMC Bank, one which was reported while the other went unreported and was allegedly done on instructions of the bank's CMD Joy Thomas. Thomas had allegedly instructed the bank's senior staff and systems department to apply access code so that the account didn't appear in the overdrawn and overdue statements. It was done to hide the company's loan exposure from the Reserve Bank of India.
Meanwhile, Darshan Majumdar, the Chief Financial Officer of HDIL, in his statement before the ED said that majority of loans, estimated to be around Rs 1,520.49 crore, were borrowed mainly by three HDIL group companies, HDIL, PPIPL and GACL. The principal amount of these loans were Rs 513.01 crore while the interest was Rs 1,007.47 crore.
Majumdar further revealed that there were around 23 HDIL group companies which were dormant.
In a separate development, the Economic Offences Wing (EOW) of the Mumbai Police on 27 December filed its first charge sheet in the case. The EOW submitted a 32,959 page charge sheet against five persons in Rs 6,300 crore fraud case in a metropolitan magistrate court in Mumbai. It has statements of 340 witnesses, including account holders in the bank.
By Chitranjan Kumar