A total of 11 companies connected to the HDIL Group with loan exposure of Rs 1,658 crore to the multi-state Punjab and Maharashtra Cooperative Bank (PMC Bank) have been traced so far. These are HDIL Budget Homes, Guruashish Constructions, Sapphire Land , Somerset Constructions, Privilege Power , Excel Arcade , Emerald Realtors, Serveall Constructions, Awas Developers , Satyam Realtors and Prithvi Realtors. The last five are also part of the FIR filed by the Economic Offences Wing of the Mumbai Police. Investigations are on to find out the connection of other companies with HDIL Group.The former Managing Director, Joy Thomas, had earlier said that the total exposure of the bank to HDIL Group companies is Rs 2,500 crore. The Mumbai police, however, has filed an FIR against the former management and promoters of HDIL for fraud of Rs 4,350 crore in the PMC Bank case. Unconfirmed reports say the bank's total exposure is up to Rs 6,500 crore. In fact, three different loan exposure figures are floating in the market.
Early this week , Sarang Wadhawn, Vice Chairman and Managing Director of HDIL, had said that the company had, over a period of time, availed of banking facilities from various banks, including PMC Bank, in the normal course of business. "Adequate security cover in favor of the banks, including PMC Bank, have been created over the assets of the company for these facilities in due compliance with all the banking regulations," he said.
In case of loan exposure of HDIL Budget Homes , Guruashish Constructions, Sapphire Land Developers , Somerset Construction and Privilege, HDIL has provided collateral in the form of land and properties.
Most of the money from PMC Bank was reportedly diverted to HDIL Group connected companies in 2017 when the group was facing liquidity issues. There were delays in payment of money to banks. The Mumbai-based Union Bank of India was the first bank to drag the group to the bankruptcy court in August 2017 after one of its subsidiaries, Guruashish Constructions, defaulted on payment. PMC extended a Rs 75 crore loan to Guruashish Constructions in April that year.
Three months later, the south-based Andhra Bank took HDIL to the bankruptcy court for non-payments of NCDs. As problems of HDIL were compounding in 2017, PMC Bank was liberally extending loans without taking into account the precarious position of the group or companies to whom it was extending loans. For example, the bank extended a Rs 136 crore loan to Sapphire Land Developers, which was consistently making losses. In fact, accumulated losses of Sapphire were more than the loan it had secured from PMC Bank. This shows complete failure of internal control and systems, as listed out by the RBI as one of the reasons for putting the bank under the charge of an administrator.