In the Punjab and Maharashtra Co-operative Bank (PMC) bank credit scam involving money laundering, about 413 parcels of farmland in the Sindhudurg district, estimated to be Rs 52.90 crore, have been temporarily secured under PMLA provisions by the Enforcement Directorate (ED).
These land parcels, with a total area of around 1,807 acres and located in Villlage Vijaydurg of Devgad taluka, were apprehended under the guidelines of the Prevention of Money Laundering Act (PMLA), 2002, the ED disclosed on Tuesday.
The ED pointed out that the listed lands, registered at a value of Rs 52.90 crore, were acquired using Proceeds of Crime worth Rs 82.30 crore during the span from 2010 to 2013.
On September 23, 2019, a prohibition on withdrawal by 17 lakh depositors from the 137 branches of the PMC bank across six states was put in effect by the RBI. This action was taken following the exposure that the top administration of the PMC Bank had illicitly approved about 73% of the bank’s loans to Housing Development Infrastructure Ltd (HDIL) group and masked the company’s non-performing assets (NPAs). This misconduct led to a band fraud worth Rs 6117.93 (principal Rs 2,540.92 crore and interest Rs 3,577.01 crore).
Following statewide protests from the affected depositors, the PMC bank was assimilated with Unity Small Finance Bank, after the Union finance ministry gave its consent to the merger in January 2022.
The Search for Culprits
On September 30, 2019, the Economic Offences Wing (EOW) of the Mumbai Police took the initial step in filing a bank fraud case regarding this matter. This led to a number of arrests, including those of the promoters of the HDIL group, Rakesh Kumar Wadhawan and Sarang Wadhawan. Other detainees included Joy Thomas, the former managing director of the bank, its chairman Waryam Singh, and an assortment of directors and senior management officials.
Following the FIR filed by the EOW, ED collaborated on a money laundering inquiry into the case and apprehended Rakesh Wadhwan and his son Sarang in October 2019.
Details of the Fraud
During the investigation, it was observed that between 2010 and 2013, Sarang and Rakesh Wadhawan had diverted Proceeds of crime amounting to Rs 82.30 crore into the accounts of 39 farmers via their subsidiary firms, Privilege Power and Infrastructure Limited and Privilege Hi-Tech Infrastructure Limited, in order to acquire lands in Vijaydurg, Sindhudurg.
By colluding with his employee Mukesh Khadpe, Sarang enticed farmers to acquire lands in their names and subsequently ceded them to the HDIL group company in exchange for commission and other advantages, the central agency declared.
Cash was used in acquiring these lands and after their registration at a value of Rs 52.90 crore, power of attorney documents were collected in favour of the HDIL Group Company, the agency added.
Though it was made to seem that these lands were purchased for port development, there was no such development.
Sarang and Rakesh Wadhawan secretly diverted crime proceeds worth Rs 82.30 crore from their subsidiary companies’ accounts into the accounts of farmers without the knowledge of the PMC bank. As a result, the assets have been temporarily secured under the PMLA, as announced by the ED.
In relation to this case, an indictment and two supplementary indictments have been submitted against Wadhwans and 36 other individuals.
Until now, assets worth Rs 719.11 crore have been seized by the agency in this case.
