PMC Bank scam: HDIL share continues to bleed, plummets over 50% in 17 trading sessions
BusinessToday.In October 9, 2019
Shares of debt-ridden Housing Development and Infrastructure Ltd (HDIL) continued its losing streak on Wednesday, falling nearly 5 per cent to hit an all-time low of Rs 3.02 on the Bombay Stock Exchange (BSE), after media reports suggested that auditors of the realty firm may be included in the ongoing PMC Bank scam probe.
HDIL stock has plummeted 52.8 per cent in the last 17 trading sessions and over 85 per cent since this year. The stock has been on a selling spree for the last few months after the real estate firm was admitted under the provisions of Insolvency and Bankruptcy Code (IBC).
In August, National Company Law Tribunal (NCLT) had passed an order that HDIL will face insolvency proceedings under the provisions of the IBC framework. The NCLT order came in response to a plea filed by public sector lender Bank of India.
Extending its previous session losses, HDIL share price declined as much as 4.73 per cent to hit its lower circuit limit of Rs 3.02 on the BSE, which was also its 52-week low and settled at the same price.
In a similar trend, stocks of HDIL ended 4.48 per cent lower at Rs 3.20 on the National Stock Exchange (NSE).
According to a PTI reports, the Mumbai Police's Economic Offences Wing (EOW) may expand its probe into the PMC Bank fraud case and the auditors of the HDIL might be included under it. 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.
Last week, the Mumbai police had arrested HDIL directors, Rakesh Wadhawan and his son Sarang Wadhawan in relation to the Rs 4,355-crore fraud at the PMC Bank. Today, the Mumbai's Esplanade Court extended the police custody of the father-son duo till October 14.
Earlier on October 7, the Enforcement Directorate had conducted fresh searches at a posh bungalow located in Alibaug in Maharashtra in connection with the PMC Bank money laundering case.
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.
Edited by Chitranjan Kumar with PTI inputs