HDIL under govt scanner; look out circular issued against MD, director

The government has issued a look out circular against two directors of realty firm HDIL after preliminary findings allegedly revealed financial irregularities at the company, according to a senior official.

A look out circular is issued against a person directing the immigration authorities to ensure that he or she does not leave India through an airport or seaport.

The official told PTI that the circular has been issued against the company's Managing Director Sarang Wadhawan and Whole Time Director Rakesh Kumar Wadhawan.

The move follows a request by the Ministry of Corporate Affairs which has been made operational by the Bureau of Immigration that comes under the Ministry of Home Affairs, the official added.

Further, the official said the circular has been issued against the two directors based on a preliminary report received from field office of the corporate affairs ministry.

HDIL is also embroiled in the crisis at Punjab and Maharashtra Cooperative (PMC) Bank, which has extended substantial amount of loans to the company.

PMC's exposure to HDIL group is nearly 73 per cent of its total loan book size of Rs 8,880 crore as of September 19, 2019, a source had said on Sunday.

In an alleged confession letter to the RBI, the bank's suspended managing director Joy Thomas had accepted giving loans to realty developer HDIL and its related entity to the tune of Rs 6,500 crore without informing all the board members.

Currently, HDIL is developing various projects at Kurla, Nahur, Mulund and Palghar and has a residential portfolio of 86.22 lakh sq ft under construction.

It has a land reserve of around 193 million sq ft as on March 31, 2019, with 90 per cent of its land reserves in Mumbai Metropolitan Region, as per the 2018-19 annual report.

Incorporated in 1996, Mumbai-based HDIL mainly focused on real estate development in the Mumbai Metropolitan Region, which included clearing slum land and rehabilitating slum dwellers.

The main source of revenue of HDIL, for long, has been selling of development rights to other property developers, after developing the slum land.

The company reported revenue of Rs 601.20 crore in FY19 and a net profit of Rs 96.19 crore.