New Delhi: The Economic Offences Wing (EOW) of the Mumbai Police on Thursday arrested the promoters of the firm HDIL — Sarang Wadhawan and Rakesh Wadhawan — in connection with the crisis at the Punjab and Maharashtra Cooperative (PMC) Bank case.
The move came a few days after the government issued a look-out circular against the two directors after preliminary findings allegedly revealed financial irregularities at HDIL. 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.
HDIL is also embroiled in the crisis at Punjab and Maharashtra Cooperative (PMC) Bank, which has extended substantial amount of loans to the company.
The Mumbai Police had on Monday filed a case against the former bank management and promoters of HDIL in the PMC Bank case and said a special investigation team will be probing it.
Crisis-hit HDIL had said that loans taken from banks, including PMC Bank, were in normal course of business after providing adequate security cover and that it is ready to discuss with the bank to protect the interest of depositors.
PMC’s exposure to HDIL group is nearly 73% of its total loan book size of Rs 8,880 crore as of September 19, 2019, a source had earlier said. 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.
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Source: News18