Housing Development and Infrastructure Ltd (HDIL) promoters Rakesh Wadhawan and his son Sarang Wadhawan, in connection with the Punjab and Maharashtra Co-operative (PMC) Bank Fraud have remanded to police custody.
They were both arrested by the Economic Offences Wing (EOW) of the Mumbai Police and produced before a Mumbai court which remanded to police custody until October 9.
Seeking remand of the Wadhawans, EOW officials told the court that a detailed probe would be needed since the size of the fraud is huge.
The EOW told the court that 70% of depositors’ money was availed by HDIL as loans while creating around 21,000 fictitious accounts to camouflage the unaccounted loans.
However, arrested HDIL promoters’ lawyer Amit Desai argued that custodial investigation would not be required since the books of accounts, records and documents are all available and that custodial investigation would also hinder the liquidation process.
He argued that there are 49 land banks lying with the PMC Bank and fixed deposits worth Rs 158 crore were also processed.
Earlier, the EOW of the Mumbai police also attached property of the Wadhawans which is worth 35 billion rupees.
A case against PMC Bank officials and HDIL chairman has also registered under Section 409, Section 420, Section 465, Section 471 and Section 120 (B) of the Indian Penal Code.
In a related development, the Enforcement Directorate charged former board members of the Punjab Maharashtra Co-operative (PMC) Bank and the Wadhawans who are promoters of HDIL have with money laundering in the Rs 6,500-crore loan default case.
The ED filed a complaint against them under the Prevention of Money Laundering Act (PMLA).
The ED case is based on a First Information Report (FIR) filed by the EOW of the Mumbai police.
The ED also conducted searches at six premises in Mumbai and other areas linked to the former chairman of the PMC Bank and HDIL promoters.
The Mumbai police complaint filed earlier alleged that PMC Bank officials misled the Reserve Bank of India (RBI)) for more than a decade from 2008 to August 2019.