The Mumbai Police filed a case against the former bank management and promoters of HDIL and PMC Bank's director and chairman. A special investigation team (SIT) is probing the case. The FIR was lodged in the case for forgery, cheating and criminal conspiracy against the officials by the Economic Offences Wing (EOW) of Mumbai Police. The bank's former Chairman Waryam Singh, Managing Director Joy Thomas and other senior officials, along with the directors of HDIL have been named in the FIR.
HDIL is embroiled in the PMC Bank crisis as the lender had extended substantial amount of loans to the company. PMC Bank's exposure to HDIL group is nearly 73 per cent of its total loan book size of Rs 8,800 crore as of September 19.
The bank's MD Joy Thomas had accepted giving loans to HDIL and its related entity to the tune of Rs 6,500 crore without informing all board members.
The FIR filed in the case said that HDIL promoters allegedly colluded with the bank management to draw loans from the bank's Bhandup branch. Despite non-payment, the bank officials did not classify the loans as non performing advances and intentionally hid the information about the same from RBI, an official statement from the police said.
They also created fictitious accounts of companies which borrowed small sums of money, and created fake reports of the bank to hide from the regulatory supervision, it said.
The government has also issued a look-out circular against two directors of HDIL after preliminary findings revealed financial irregularities at the company. An official told news agency PTI that the circular has been issued against PMC Bank's Managing Director Sarang Wadhawan and Whole Time Director Rakesh Kumar Wadhawan. The directors will not be able to leave the country through an airport or seaport.
Currently, HDIL is developing various projects at Kurla, Nahur, Mulund and Palghar and has a residential portfolio of 86.22 lakh sq ft under construction. Incorporated in 1996, Mumbai-based HDIL mainly focused on real estate development in the Mumbai Metropolitan Region, which included clearing slum land and rehabilitating slum dwellers. The company reported revenue of Rs 601.20 crore in FY19 and a net profit of Rs 96.19 crore.
PMC Bank, which has 137 branches and over Rs 11,000 crore in deposits, has been put under restrictions after the RBI discovered certain financial irregularities. Under the restrictions, a depositor can withdraw only Rs 10,000 per account for the next six months.
The restrictions have led to a massive public outcry with people thronging the branches for their money.