PMC Bank: HDIL Directors Rakesh Wadhwan and Sarang Wadhwan Arrested by EOW, says Report
Moneylife Digital Team 03 October 2019
The economic offences wing (EOW) of Mumbai police has arrested Housing Development and Infrastructure Ltd (HDIL)'s promoters and directors Rakesh Kumar Wadhwan and his son Sarang in the Rs4,355 crore Punjab and Maharashtra Cooperative (PMC) Bank cheating case.
According to a report from Times of India (ToI), both the Wadhwans will be produced before a court on Friday. They were summoned by the police on Thursday morning but reportedly "not cooperating" with the investigators and later placed under arrest, the report says.
Earlier this week, the EOW has registered a first information report (FIR) against senior officials of HDIL and PMC Bank. This included, PMC Bank's now-suspended Managing Director Joy Thomas, Chairman Waryam Singh and other executives. It also mentioned involvement of Sarang Wadhawan, the vice chairman and managing director of HDIL. 
The FIR has been filed under Sections 409 (criminal breach of trust by a public servant or banker), 420 (cheating), and 465, 466 and 471 (related to forgery) of the Indian Penal Code along with 120 (b) (criminal conspiracy). 
As per the complaint, the bank officials, between 2008 and 2019, deliberately violated banking norms and showed false profits to mislead the authorities, although the bank was actually incurring losses. 
It also said that the bank also veiled the group's large exposure and non-performing assets (NPAs) from the Reserve Bank of India (RBI) by creating dummy accounts.
pravin banker
4 years ago
"A rush to close the barn doors once the horses have bolted".
There is worse to come. For more than 30 years the norm was to bribe bank officials with 2 to 5% of the moneys borrowed and banks simply juggled their books to hide the defaults often evergreening loans. The standing joke on how to become a billionaire was "have a friendly banker". Banks loved to lend on real estate and all a borrower needed was a inflated appraisal from two friendly appraisors. NOW its coming home to roost. There is far more bad news ahead and - as bad as the Sensex fall looks now - it will get a lot worse. Without evergreening and even more loans borrowers - particularly in real estate - will default.
I have a Nephew in Mumbai. For years he put 10% down on fancy Mumbai apartments and then flipped on delivery making money. Prices always went up. This time around he sold his 10% deposits to some suckers for 6%... HE knows that the developers are collapsing and better to lose 4% than 10%. He has also exited his long positions and is a seller on rallies.
Brace yourselves. Global turmoil just adds to the angst
mg patil
4 years ago
Great job. We all support strong action against directors, auditors and the authorities who failed to take timely action.
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