ED steps in to probe money laundering in PMC Bank case, HDIL promoters on radar

Mangalore Today News Network

Mumbai, Oct 04, 2019: Enforcement Directorate, the federal agency mandated to probe financial crimes, on Friday filed a money laundering case in the Punjab and Maharashtra Co-operative Bank (PMC) scam. The case is being investigated by the economic offences wing of Mumbai police.

The ED began its probe with raids in six locations in Mumbai and adjoining areas to probe alleged fraud in the PMC Bank case, reported news agency PTI quoting officials. The central agency is taking a hard look at the role of the Housing Development Infrastructure Limited (HDIL) promoters. Two of them, director Rakesh Kumar Wadhawan and his son Sarang Wadhawan, have been arrested in the case, Hindustan Times reported.

 

HDIL accounted for nearly 73% of the bank’s total loans. Out of the Rs 4,355 crore of loans under the scanner, around Rs 2,146 crore were transferred to accounts held by the Wadhawans. An account belonging to Rakesh Kumar Wadhawan had a balance of Rs 2,009 crore on August 31, 2019, according to the FIR.

An initial probe by the Reserve Bank of India had revealed that directors of PMC Bank, in connivance with others, had replaced 44 suspicious loan accounts with 20,149 fictitious bank accounts whose individual balances were low.

The 44 borrower accounts allegedly linked to HDIL were masked by tampering with bank software. Only a small group of employees, allegedly close to PMC bank’s former managing director Joy Thomas, were aware of these bank accounts.

These accounts reflected large amounts of loans acquired by HDIL and were masked with a special password.