According to reports, Punjab and Maharashtra Cooperative Bank (PMC), on which the Reserve Bank of India recently placed restrictions, breached exposure norms while dealing with HDIL which happens to be one of its biggest corporate borrowers.
The Ministry of Corporate Affairs has decided to inspect books of Housing Development and Infrastructure Limited (HDIL) under Section 206 of the Companies Act, on suspicion of diversion of funds, sources told Moneycontrol.
Section 206 of the Companies Act pertains to inspection, inquiry and investigation of the affairs of a company.
HDIL has been in the news after it emerged that the Punjab and Maharashtra Cooperative Bank (PMC) -- on which the Reserve Bank of India recently placed restrictions -- had been a beneficiary of a bulk of the bank's loans in violation of norms.
The management of PMC Bank, which may have lent about Rs 6,500 crore to HDIL (or about 73 percent of its total book) management was superseded by the RBI, which appointed its own administrator.
Given the uncertainty over the returnability of the loans, the RBI also imposed restrictions on withdrawals by depositors of about Rs 1,000 initially, which was later revised to Rs 10,000.
HDIL is already facing bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC).
This evening, the Economic Offences Wing of the Mumbai Police registered an FIR against senior officials of PMC Bank as well as HDIL for fraudulently causing losses to the tune of Rs 4355.43 crore to the bank.
The FIR named PMC Bank's Managing Director (now suspended) Joy Thomas, Chairman Waryam Singh and other executives. It also mentions the involvement of Sarang Wadhawan, Vice-Chairman and Managing Director of HDIL.HDIL could not be immediately reached for a comment.LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.