MUMBAI: The Mumbai unit of the Enforcement Directorate (ED) has submitted a third supplementary charge sheet against eight additional accused who acted as “benamidars” in the ₹6,117-crore fraud involving the Punjab and Maharashtra Co-operative (PMC) Bank and its alleged unlawful dealings with real estate firm Housing Development Infrastructure Limited (HDIL). A benamidar is a person or entity in whose name a property is held, but they are not the actual owner.
According to the agency’s charge sheet, HDIL promoters Rakesh Kumar Wadhawan and his son Sarang Wadhawan, with the help of other accused persons, allegedly diverted ₹82.3 crore of PMC Bank’s loan funds to fraudulently acquire agricultural land parcels in the Vijaydurg village in Sindhudurg for the development of the proposed Vijaydurg Port project, which never materialised.
The funds were initially transferred to the accounts of 39 local farmers through HDIL subsidiary companies Privilege Power and Infrastructure Limited and Privilege Hi-Tech Infrastructure Limited, officials said. The accused, in connivance with an HDIL employee, Mukesh Khadpe, then persuaded the farmers to acquire land parcels in their names and, thereafter, transfer them to an HDIL group company in exchange for commissions and other benefits, according to the charge sheet. The agency had earlier provisionally attached land parcels spanning around 1,807 acres, with a registered value of ₹52.9 crore.
“Though these lands were purportedly acquired for the development of ports, the same were never developed,” said an ED official, requesting anonymity. “The HDIL promoters, from their subsidiary companies’ accounts, allegedly diverted proceeds of crime to the tune of ₹82.30 crore to the accounts of farmers, while keeping the PMC Bank in the dark… The charge sheet establishes the money trail from HDIL accounts for land acquisition in Sindhudurg through benamidars led by Khadpe.”
The ED filed its main charge sheet in the case in December 2019, followed by two supplementary charge sheets in March 2022 and May 2023, respectively. Rakesh and Sarang Wadhawan were charged with money laundering under the provisions of the Prevention of Money Laundering Act (PMLA). The agency has charged 46 accused so far and provisionally attached or seized assets worth over ₹772 crore in the case.
On July 25, a special court for PMLA cases noted, “Considering the prosecution complaint, the supporting documents and the material on record, it shows that the ED has collected sufficient evidence against the accused.”
The case
The ED had initiated its investigation based on a case registered against Rakesh and Sarang Wadhawan, then PMC Bank directors Joy Thomas and Waryam Singh, and others under sections of the Indian Penal Code.
The agency’s investigation revealed that HDIL and its group companies allegedly availed overdraft (OD) loans from PMC Bank without proper documentation and mortgage. The OD limit was allegedly enhanced periodically to ensure that the loan accounts of HDIL and its group firms were not classified as non-performing assets (NPAs) and, instead, the bank capitalised the interest part and enhanced the OD limit to that extent.
The investigation also revealed the alleged fabrication and falsification of PMC Bank’s loan accounts, wherein 44 NPA loan accounts of the HDIL group were replaced with 21,049 fictitious accounts to deceive RBI and depositors, according to the ED.