Monday, June 21

PMC Bank: ED arrests HDIL promoters on money laundering charges

Mumbai: The Enforcement Directorate (ED), which is investigating suspected money laundering in the Punjab & Maharashtra Cooperative (PMC) Bank fraud case, arrested Housing Development Infrastructure (HDIL) promoters Rakesh and Sarang Wadhawan on Friday.

The two were produced before the special Prevention of Money Laundering Act (PMLA) court, which sent them to ED custody till October 22. According to the remand application filed by ED, the custody was needed to unearth the proceeds of the crime.

“… it prima facie appears that the said persons arrested by the Economic Offence Wing (EOW), Mumbai Police have played a key role in the execution of illegal transactions as alleged in the FIR filed by the EOW and have actively participated in the generation of proceeds of crime from the criminal activity related to schedule offence,” it stated.

“Further, it also appears that they are the actual beneficiaries of the proceeds of crime,” it added. Contesting the ED’s plea, Wadhawans’ counsel Amit Desai argued that an impression is being created that his clients have siphoned off depositors money for a “good life”.

The fraud at PMC Bank came to light after the Reserve Bank of India discovered that the bank had allegedly created over 21,000 fictitious accounts to hide over Rs 4,300 crore of loans extended to almost-bankrupt HDIL. A manager of the bank on behalf of the RBI-appointed administrator then filed a case with the EOW. HDIL promoters, suspended PMC Bank MD Joy Thomas, ex-chairman Waryam Singh and director SS Arora were arrested by the EOW during the course of the probe.

While HDIL promoters are now in the custody of ED and Arora is in Mumbai Police’s, the other two ex-bank officials are lodged at Mumbai’s Arthur Road jail.


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