The Wadhawans were arrested in connection with the Punjab and Maharashtra Co-operative (PMC) Bank scam by the Economic Offenses Wing (EOW) of the Mumbai police on October 3.
Joy Thomas, the suspended Managing Director of PMC Bank, will remain in custody until October 17.
Thomas was arrested in connection with the Punjab and Maharashtra Co-operative (PMC) Bank scam by the Economic Offenses Wing (EOW) of the Mumbai police on October 4.
Managing Director of PMC Bank Joy Thomas was also arrested by the EOW on October 4. The Enforcement Directorate (ED) has also frozen Thomas' bank accounts. His bank deposits, or fixed deposits had close to Rs 10 crore.
Documents submitted by the EOW allege that Thomas, senior executives and board members of PMC bank intentionally camouflaged the actual loan account details of HDIL Group.
PMC Bank was accused of creating nearly 21,049 dummy accounts with small outstanding balances in the master sheet submitted to RBI. These accounts were replaced with 44 loan accounts of HDIL and its group companies with outstanding debt of Rs 4,335.46 crore. EOW wants to know the exact details of these 44 loan accounts in their investigation. However, of these 44 accounts, only 10 belong to HDIL group.
From the 44 accounts, 10 held outstanding debt of up to Rs 4,335.46 crore. HDIL and its group companies including Somerset Construction, Serveall Constructions, Sapphire Land Development, Emerald Realtors, Prithvi Realtors & Hotels, Satyam Realtors, Sarang Wadhawan, Rakesh Kumar & Kuldeep Singh Wadhawan and HDIL are holders of the 10 accounts.
Thomas was absconding from the last five days before he was finally arrested yesterday in Navi Mumbai.
In court, Thomas' lawyer argued that he is an old-age man, and requires some medicines, which the court allowed during the investigation.
EOW will confront the Wadhawans and Thomas during the investigation. Hence both are in the custody of EOW.As per sources, ED will also take custody of Wadhawan and Thomas soon. However, former chairman Waryam Singh is still absconding. Both the EOW and ED is on the lookout for him.
The Wadhawans were arrested by the EOW under sections 406, 409, 420, 465, 467, 471 and 120(b) of IPC. A case against Thomas was registered following a complaint lodged by Jasbir Singh Bhatta, Manager of PMC Bank.
As per EOW, the total exposure of Sarang Wadhawan’s account was Rs 128.65 crore, while Kuldeep Singh Wadhawan and Rakesh Kumar Wadhawan had exposure of Rs 1,992 crore, and HDIL group’s exposure stood at Rs 1,306.2 crore.
EOW sources told Moneycontrol, "[Former chairman of PMC Bank] Waryam Singh was untraceable and statements of certain PMC bank officials were being recorded.”
PMC Bank was put under directions by RBI for fudging its loan book to attract new depositors by inflating their loan book and camouflaging its actual debt.
The EOW documents further accused Sarang and Rakesh Wadhawan of playing key roles in fraudulent activities and have sought their custody to track details of the loans.
Questions were also raised on how the Wadhawans had used the funds borrowed by HDIL Group against various accounts from PMC Bank. EOW suspects that HDIL Group has utilised the borrowings to repay outstanding debts with other banks.
Meanwhile, the defence counsel for the Wadhawans said that the prosecution had set a “bad example” by arresting HDIL promoters.
"The promoters are fully coordinating with the regulators and the agencies," the counsel said and added that the loans taken by HDIL from PMC Bank were backed by security and that the arrest will now make it difficult to monetise the company's assets.
According to the counsel, a Rs 100-crore deal was cancelled following the arrest of the Wadhawans.
Prosecutors should maintain balance between "[the need for] seeking custody and the public interest", the counsel said and pointed out that the HDIL promoters were willing to submit their passports to the authorities.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.