PMC Bank Fraud: ED Seizes Assets Worth over Rs3,830 Crore of HDIL, Bank Officials
Moneylife Digital Team 14 October 2019
The Enforcement Directorate (ED) on Monday seized and identified movable and immovable assets worth more than Rs3,830 Crores owned by Housing Development and Infrastructure Ltd (HDIL), the company directors and promoters, as well as official of Punjab and Maharashtra Cooperative (PMC) Bank and others related entities in the PMC Bank fraud case.
The ED said that it was in process to identify and locate more of such laundered assets for attachment.

In a statement the ED said, "Documents relating to purchase of 2,112 acre of land have been found. Value of land varies between Rs1.5 crore to Rs5 crore per acre. Verification of land details is in progress. The present value of the said land is likely to be more than Rs 3,000 crore."

Besides the 2,112 acres of land, the agency said that the seized documents have revealed that HDIL has work in progress at around 80 unencumbered properties in and around Mumbai. "The valuation and ownership of the said properties is being ascertained," it said.

It also said that three flats in Mumbai's Pali Hill worth Rs8.2 crore, 160 acres of land acquired in Maharashtra's Sindhurdurg for Vijay Durg Port Private Ltd in 2013-2014 worth Rs125 crore, 72 acres in Hyderabad's Kukatpally owned by My Palace Society in which HDIL has 55% share out of which 24 acres title is valued at Rs70 crore.

The ED also said that it has identified 80 acres of land in Uttar Pradesh's Greater Noida on Yamuna Expressway Project jointly held and valued at Rs110 crore, one bungalow in Mumbai valued at around Rs110 crore, farmhouse spread in 2.5 acres land along with 22 lavishly embellished rooms worth Rs80 crore, farm house in five acre land along with high quality construction worth Rs60-70 crore, two overseas properties in the name of Wadhawans (Rakesh Wadhawan and Sarang Wadhawan) in UAE and UK have been identified.

The said properties will be attached under the Prevention of the Money Laundering Act (PMLA) in the coming days.
So far the ED has seized several movable and immovable assets in the PMC Bank fraud case. From HDIL promoters and directors, the ED has seized 10 cars, including Rolls Royce, Bentley and Range Rover residents of Rakesh Kumar Wadhwan.

It seized jewellery worth Rs66 crore from several residential premises, including on of Meena Rohra, who is business associate of Rakesh Kumar Wadhwan.

From the Alibag-based farm house of Wadhwans, the ED seized four vehicles, including an Audi, Toyota Fortuner, Innova and Mahindra Scorpio, three buggies, two Quadros (all terrain bikes) and a speed boat.

ED also freeze fixed deposits (FDs) worth Rs1.50 crore belonging to the Wadhwans from several banks.

The agency identified two aircrafts, Bombardier Challenger 300 VT and Falcon 200 VT HDL owned by Privilege Airways Pvt Ltd, where both Rakesh Kumar and Sarang Wadhwan are directors. These aircrafts have been kept in custody of Mumbai International Airport, the ED says.

Taking cognizance of the FIR filed into the matter by Mumbai Police's Economic Offences Wing (EOW), the ED had filed a money laundering case against HDIL promoters in the PMC Bank fraud case.

The ED had earlier carried out raids at multiple locations in Mumbai, including the head office of HDIL in Bandra (East) and the residence of Rakesh Wadhawan which is known as Wadhawan House in Bandra (West).

The agency also raided the premises of former PMC bank chairman Waryam Singh and former PMC Bank Managing Director Joy Thomas.

The Directors of the HDIL were arrested on 3 October 2019 by the Mumbai Police after they were found not cooperating with the sleuths.

It is alleged that HDIL, which is facing bankruptcy proceedings, and its group companies had taken huge loans from the PMC Bank. As many as 21,049 fictitious bank accounts were allegedly created to hide the loans, which were disbursed in violation of RBI norms.

It has also been alleged that HDIL accounted for nearly 73% of the bank's total loans. Out of the Rs4,355 crore loans under the scanner, around Rs2,146 crore were transferred to accounts held by the Wadhawans. An account belonging to the Wadhawans had a balance of Rs2,009 crore on 31 August 2019, according to the FIR.

During the probe by the Reserve Bank of India, it was found that directors of PMC Bank had replaced 44 suspicious loan accounts with 20,149 fictitious bank accounts with low individual balances by tampering with bank software. The PMC Bank's former Managing Director Joy Thomas was allegedly behind the masking of the borrowers' accounts.
Rajneesh Agarwal
4 years ago
I just cannot imagine the complex fraud and the collusion of RBI..
shivaprasad chhatre
4 years ago
I wish to share one less known thing about PMC Bank:
Tier-II bond-like debt instruments (LTD) issued by many Coop Banks including (PMC) to gullible customers (and has no regulatory oversight)
It is mostly unknown to many that PMC bank has issued high risk ‘LTD’ product. Investors in LTD should forget getting money back. RBI’s directions to cooperative bank on issue of specific unrated loan/debt product to qualify for tier-II capital of such bank
[mis-tiltled by RBI as Long Term Deposit (LTD)] are ‘pathetic’. It is a debt procurement instrument with several severe conditions about repayment attached to it. It is surrogate of bond/debenture by whatever name RBI may call it to be.

Considering the associated risk to investors/depositors (LTD product) I first took the matter RBI’s Legal and Coop Bank Regulation departments of RBI and after seeing no response (to my dozens of communications), I took the public interest matter with High Court of Bombay. After the reference of the honourable high court of Bombay to RBI based on my initiative, RBI hurriedly changed its directions* issued in year 2008 and issued amendment to directions in year 2015. However even RBI’s modified ‘LTD’ guidelines to major extent are very defective even now. Around that time I also made a clear reference (text can be shared) to SEBI but both RBI and SEBI tossed the matter to each other. After some time I stopped following up the matter. But in case of instances like PMC bank (above) and another co-op bank) mainly senior citizen category depositors/investors do suffer.
I think someone may write on the fate of LTD (Tier-II bond) holders of PMC bank (other banks like TJSB /Sarawat Coop Bank, who also issued them and marketed them vehemently, as it helped to augment tier-II capital), wherein main investments came from pensioners (these are actually retail bonds) or (debentures you may call like issued by corporate without SEBI’s approval).
For various reasons one may clearly say that this LTD product is totally unregulated. The whole bond / ‘LTD’ issue, even today, is going on without following established law of the land (stamp Act, lack of existing route, nature of the instrument, listing, nomination rules, to name a few). In 2015-16 I perused ‘LTD’ documentation of PMC and found it just horrible. I had then taken up public interest matter with RBI, with vague response from PMC bank.
You may notice observe that ‘LTD’ is a high-risk debt capital instrument issued by co-op banks. Several retired personnel are existing investors / called depositors (funds raised in future are going to be huge). It is not a deposit per se.
Probably, RBI is not still aware that it had entered the domain of SEBI and is actually permitting “private placement of a public issue” (a terminology not prevalent anywhere in the finance world) to the general public to whom it can be easily ‘mis-sold’. On the guise of simple investment avenue probably (inadvertently) promoting an illegitimate product. SEBI has banned retailing of tier-ii debenture/bonds by banks issuing offer document
It is a risky product as a popular Money market Product CBLO(which after my years of a long battle with RBI) that was withdrawn by RBI, silently. Both SEBI and RBI seem to now revisit this matter. Extract of my communication to SEBI & reply I received from SEBI can be shared.
*RBI issued DCB. BPD. MC 10/09.18.201 /2015-16 dt: 01-07-2015 modifying its original circular UBD.PCB.Cir No.4/09.18.201/-8-09 dt: 15-07-2008 (I have with me internal RBI correspondence, which I got under RTI)
Monika Bhatia
4 years ago
We want justice resolution money dramas
Monika Bhatia
4 years ago
Monika Bhatia
4 years ago
Plea from most vulnerable section in human community #Senior Citizens #PMC bank case

Lets join hands and plea the Government ;trustfully voted Modi Sarkar; RBI official aka trustful body to safegaurd customers interest; PMC bank aka trusted insitution to safegaurd their living needs and medical emergencies of more than 50 years of hardearned savings.Their money made look the banks richer and healthier ( rated as Top 5 cooperative banks of India) and so the economy.

The broken spines and dried eyes are now withunstoppable tears and going through an agony which needs to be mended ASAP pleading joining hands for their own money own savings for their daily living, medical routine; deferred dreams for today and meet huge medical emergencies they foresee.Perhaps dreams of 4 decades saving on a beautiful trip in their old age.To spend their money with pride today.They deserve yes they well deserve it all!

Biggest shock for Senior Citizens!
Like every zone every facet on special treatment to senior citizens-6 months period of restriction please waive for this most deserving weaker and vulnerable section of the society.Process 100% of their monies in form of savings or deposits etc to them respectfully.

They have contributed for more than 5 decades to the society ; paid taxes; declared their incomes.Their need is urgent and humongous.

Modiji / RBI / India : Can we wipe tears from their eyes staring with hope; shivering hands ; knowing no one to plead to; broken spine ; shaky walk ....lets help them to stand back !!!!

They immediately need it all.their life their savings their Life Support.Don't let them break or die with pain they have already seen and suffered many...

Let's make the plead Viral and share it on minimum 5 whatsapp group or as many as you can.All your social media handles.And make reach their plea for section who cant speak for themselves.But they did maximum for the economy.They are the most loyal vote banks.Maximum years of tax paying.Maximum years of contribution to economy.

On behalf of Senior Citizens:(

All of equally affected but lifesaving support is immediate need of this section.Let them proudly say again "Har baar Modi Sarkaar"
Nagaraju Bommanahalli
Replied to Monika Bhatia comment 4 years ago
Only drama by NDA ,ask till today how much money returned so far from fraud bankruptcy of banks and companies, nothing returned,we are all blindly voting them ,
N M Ajugia
Replied to Monika Bhatia comment 4 years ago
When it is reported that ED has attached more than 3000cr property, why ED cannot ask RBI to infuse relief so that account holders start getting money? If Govt can wave infuse money in other cases, Govt should do for this. Account holders are not at fault at all.
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