A day after the economic offences wing (EOW) of the Mumbai police arrested Housing Development & Infrastructure (HDIL) promoters Rakesh and Sarang Wadhawan, the department on Friday apprehended former Punjab and Maharashtra Co-operative (PMC) Bank managing director Joy Thomas in connection with the alleged multi-crore scam at the bank.
The Wadhawans were produced before a local court in Mumbai on Friday, which sent them to police custody till October 9.
The police filed a first information report (FIR) in the matter on September 30. The Enforcement Directorate (ED) has also registered a criminal case of money laundering against PMC Bank’s former chairman S Waryam Singh, Thomas, the Wadhawans, and all the other officials and entities named in the FIR.
Thomas is considered to be at the centre of the PMC Bank scam. He has already confessed that he misled the Reserve Bank of India (RBI) over the last five years and created over 21,000 dubious accounts to hide loans given to Mumbai-based realty firm HDIL with the help of some PMC Bank officials.
PMC Bank has given loans of Rs 6,500 crore, which accounts for 73 per cent of the bank’s loan book of Rs 8,880 crore.
On Thursday, the EOW arrested the Wadhawan duo and seized assets worth Rs 3,500 crore. The special investigation team of the Mumbai police also froze Thomas’ bank accounts, searched the residence of Waryam Singh, and seized one of his demat accounts having investments of Rs 100 crore. Police sources said they were still on the lookout for Singh.
The PMC Bank scam came into the limelight after a whistle-blower informed the RBI to look into the books of the cooperative bank. Acting swiftly, the RBI on September 23 placed PMC Bank under an administrator, suspended the management, and placed curbs on deposit withdrawals.
Thomas in a five-page letter to the Reserve Bank of India dated September 21 confessed to the role of the top management in hiding the bank’s non-performing assets and the actual exposure to HDIL, which lenders have taken to insolvency court.
In a clarification letter written to the exchanges, HDIL Vice-Chairman and Managing Director Sarang Wadhawan had said the loans taken from PMC Bank and other lenders were in the normal course of business after providing adequate security cover.