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Ex-PMC Bank chairman, HDIL promoters' police custody extended till October 14

BusinessToday.In     October 9, 2019

A Mumbai court has extended the police custody of HDIL promoters Rakesh Kumar Wadhawan and Sarang Wadhawan till October 14. Former chairman of Punjab and Maharashtra Co-operative (PMC) Bank Waryam Singh has also been sent to police custody till October 14. They will be further interrogated by the Mumbai Police in relation to the Rs 4,355-crore fraud at the bank.

The Mumbai police had arrested Rakesh and Sarang on Thursday last week in relation to the PMC Bank fraud. Singh was arrested on Saturday last week. All three were sent to police custody till October 9 after arrest. Former PMC Bank managing director Joy Thomas is already under police custody till October 17.

Meanwhile, the Economic Offences Wing (EOW) of Mumbai Police is also planning to question auditors of Housing Development and Infrastructure Ltd (HDIL) in the PMC Bank scam. Mumbai-based chartered accountant firm Rajeswari and Associates was the legal auditor of HDIL. The auditors allegedly did not classify loans to HDIL as non-performing assets (NPA) as per RBI guidelines despite multiple payment defaults on the company's part.

ALSO READ: PMC scam: After bank officials, now auditors to face probe

The PMC Bank fraud came to light after the RBI found irregularities at the bank and imposed operational restrictions on the lender. Former managing director of the bank, Joy Thomas, wrote a letter to RBI, detailing the chain of events which led to the bank's Rs 6,500 crore exposure to HDIL. This amount is four times greater than the regulatory cap or at least 73 per cent of PMC Bank's entire asset pool of Rs 8,880 crore.

Moreover, fearing potential audit lapses, the EOW has asked PMC Bank to appoint a forensic auditor to revalidate its financials, money trails and audit reports. Grant Thornton has been hired by PMC Bank as a forensic auditor. Based on the Mumbai Police's FIR, the Enforcement Directorate has also registered an Enforcement Case Information Report against the erring officials.

ALSO READ: PMC Bank crisis: Fictitious accounts created by lender belonged to dead people, says Mumbai Police

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