The Enforcement Directorate has revealed that Punjab and Maharashtra Cooperative Bank disbursed fresh loans to embattled Housing Development and Infrastructure Limited merely 23 days before RBI clampdown against it. Senior officials from the cooperative lender and realty firm are facing prosecution over loan fraud which is estimated at R 6,300 crore.
The Reserve Bank of India (RBI) had imposed operational restrictions against Punjab and Maharashtra Cooperative (PMC) Bank citing alleged wrongdoing. Further investigation revealed that the urban cooperative lender created more than 21,000 fictitious accounts to hide non-performing assets (NPAs) in the name of Housing Development and Infrastructure Limited (HDIL) group companies.
The Enforcement Directorate (ED) has found that PMC Bank disbursed loan worth Rs 50 crore to HDIL on August 23, 2019, merely 23 days before the RBI action. The charge sheet filed by the probe agency earlier this month has revealed that HDIL group companies need to repay Rs 6,117.93 crore to PMC Bank as on August 31, 2019.
The ED investigation has revealed HDIL group companies borrowed around Rs 2,540 crore from PMC Bank. It then rose to Rs 6,117.93 crore with interest due to non-payment. These funds were used to meet debt obligations of other banks. PMC Bank officials have stated that this done in connivance with certain bank personnel and board members.
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.