People thronged outside PMC bank in Andheri's Poonam Nagar
People thronged outside PMC bank in Andheri's Poonam Nagar

Mumbai: The promoters of bankrupt realty firm, HDIL, Rakesh Wadhwan and his son Sarang, were remanded to the Economic Offences Wing (EOW) custody till October 9 on Friday.

The duo were arrested by the EOW on Thursday in connection with the Rs 4,355.46 crore fraud in the Punjab and Maharashtra Co-operative (PMC) bank. They have been charged with cheating, fraud, falsification of accounts and criminal conspiracy in the FIR registered with EOW on Monday.

While seeking Wadhwans’ custody, EOW told the court that their interrogation was necessary keeping in mind the magnitude of the scam in which they figure as the key accused.

They (Wadhwans) had created over 21,000 accounts to camouflage the outstanding loans that were taken from the accounts of 70 per cent depositors.

Moreover, from the initial scrutiny of financial statements, it was indicated that large amount of the bank’s funds had been diverted and misappropriated. The interrogation of Wadhwans had become important in order to prevent further financial catastrophe to the bank, EOW stated.

EOW told the court that from the preliminary inquiry, it appeared that funds availed by HDIL from PMC had not been utilised for the designated purpose of borrowal.

RBI had been kept in the dark over the years by submitting false records by the accused (including PMC staff) in the scam. By questioning the accused, the sleuths wanted to know if the same modus operandi had been adopted by them to perpetrate a similar fraud in other banks too, EOW told the court.

Moreover, the interrogation of the accused is likely to facilitate in locating the whereabouts of the other accused in the scam who are still to be arrested, EOW said.

Counsel for the Wadhwans’, advocate Amit Desai, while opposing the EOW contention, told the court that his clients were ready to repay the loans.

Their custody would hamper the liquidation process of the firm, which will ultimately hamper the interest of the depositors. He said the 49 land parcels, fixed deposits worth Rs 158 crore pledged as collaterals would help repay the loans.

The court, while turning down the police’s plea to grant 14 days custody to the accused, granted custody 7 days custody instead. HDIL premises searched again, ED steps in

Offices and residential premises of HDIL’s promoters were searched by the Economic Offences Wing (EOW) for the second time on Friday.

EOW sources said the Khar (W) residence of Rakesh and Sarang Wadhwan and their offices at HDIL’s headquarters in Bandra (E) were searched in connection with the present investigation into the Rs 4,355 crore scam in PMC.

The sleuths also confiscated the hard disk of computers at HDIL and the PMC Bank’s central office in Bhandup (W). This, sources said, was necessary to ferret out data that will later be subjected to

scrutiny by forensic auditors. “The actual quantum of loans (allotted to HDIL and other concerns) would be established following the audit,” an EOW official said. The EOW has already appointed an auditing firm to help in the investigation.

“Every aspect of the internal transaction of the bank will be investigated,” the official said.

Meanwhile, the Enforcement Directorate (ED) on Friday registered an Enforcement Case Information Report (ECIR) against the accused named in the EOW FIR in the PMC bank fraud investigation.

Sources said that six locations, including the residence and premises of HDIL promoters, were searched by the ED sleuths in connection with the case. Attachment of immovable and movable properties of the accused is likely to follow, sources added.

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