Mumbai: The Mumbai Police Economic Offences Wing on Monday booked the chairman and managing director of the crisis-ridden Punjab and Maharashtra Co-operative bank, along with chairman of bankrupt real estate firm, Housing Development and Infrastructure
Limited, for defrauding the bank of Rs 4355.46 crore by entering into a criminal conspiracy.
Mumbai police sources told the Free Press Journal that an FIR was lodged under the relevant sections of the IPC at the Bhandup police station, on a complaint lodged by Jasbir Singh Mattha, one of the directors of the PMC bank, on behalf of the RBI-appointed administrator J B Bhoria.
The investigation of the case was transferred to the EOW following the registration of the FIR. Sources said that the EOW has formed a Special Investigation Team to conduct the probe.
A top Mumbai police official told FPJ that pending the probe, persons within the ambit of investigation, would not be allowed to travel out of the country.
"We have made the necessary arrangements to prevent their escape from the country," the official added.
The FIR names the ousted managing director of the bank Joseph Thomas, chairman Waryam Singh and chairman of HDIL group Rakesh Wadhawan as accused.
"We will include the names of other functionaries of the banks' board and officials of the firm HDIL -- who had participated or aided in the crime -- in the FIR, as and when they are identified," an EOW official said.
Amid reports that the bank reportedly sat over Rs 6,600 crore of its Non-Performing Assets, which was uncannily equivalent to the unrecovered loan allotted to HDIL, the official said,
"The assessment of Rs 4388.43 crore loss suffered by the bank is based on prima facie findings. It is possible more loans could have gone underreported or were not reported at all," he said.
According to the FIR, the embezzlement and misappropriation of the bank took place between 2008 and August 2019, wherein huge volumes of loans were allotted to HDIL and its' subsidiary firms by opening accounts in the PMC's central branch at Bhandup (w).
Though the loans were defaulted, the outstanding money was never shown as the bank's Non-Performing Assets during the audits; neither was the RBI informed about it. Rather, separate fake accounts were created where lesser volumes of non-refundable loans were shown during audits.
"As a result of the embezzlement and misreporting, prima facie, it appears the losses suffered by the bank went up to Rs 4355.46 crore over the years," an EOW release stated.
As per the EOW, the plunder of the bank could not have been possible without a criminal nexus between the office bearers of the bank and the HDIL who were the end beneficiaries of the scam.
On Friday, the RBI administrator had approached the EOW to register an FIR into the alleged fraud. However, EOW officials asked him to furnish the relevant documents for scrutiny which is mandatory before the registration of an FIR in a fraud involving Rs 6 crore or more.
The RBI move came on a day ousted MD Joy Thomas held a press conference admitting that the loans extended by the bank to HDIL were not classified as NPAs in the past six-seven years, fearing it could hamper the quick growth of the bank.
He then went on to accuse the RBI auditors of failing to detect the wrong doings and claimed that the facts about the financials of the bank was disclosed to the regulatory authority by the bank management itself. The fraud was detected by the RBI following a whistle-blower complaint on September 17.
Two days later, the bank's board wanted to surrender the license. However, the RBI suspended the Board of Directors and appointed an administrator to conduct an inspection. Initially, withdrawals by depositors were restricted to Rs. 1,000 which was later raised to Rs 10,000.
By Debasish Panigrahi