June 15, 2024

In an unfolding bank loan fraud investigation filed by Punjab and Maharashtra Co-operative Bank (PMC), the Enforcement Directorate (ED) has temporarily seized four levels of the One Continent Hotel situated in Hyderabad. The estimated value of the seized assets totals up to Rs 43.84 crore.

The relevant officials have clarified that the properties in dispute, specifically the second, third, fourth, and fifth floors of the hotel, were temporarily seized according to the Prevention of Money Laundering Act (PMLA), 2002 stipulations.

The ED probe commenced based on an FIR lodged by the PMC outlining its case against several individuals including Joy Thomas, Waryam Singh ( former Directors of the PMC Bank), Rakesh Kumar Wadhawan, Sarang Wadhawan, in addition to unidentified individuals.

Additionally, the ED suspects Housing Development and Infrastructure Pvt Ltd (HDIL), its promoters, and their associates of fraudulent activities leading to losses amassing to Rs 6,117.93 crore (main amount Rs 2,540.92 crore and interest Rs 3,577.01 crore) for the Punjab and Maharashtra Co-operative Bank (PMC).

A detailed investigation following this development under the PMLA revealed that from 2006 to 2014, the promoters of HDIL had illicitly transferred crime proceeds totalling Rs 43.84 crore to entities in Hyderabad. These include M/s My Palace Mutually Aided Cooperative Housing Society and M/s Anish Construct; thus, stated the ED in an official communication.

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Rakesh Wadhwan carried out this fraudulent transfer under the guise of legitimate business activities while successfully concealing it from PMC Bank.

As the investigating officers pursued the case, assets amounting to Rs 43.84 crore were discovered to belong to Shripad Deshpande’s Group of Companies; subsequently, these assets were temporarily seized under the PMLA, as revealed by the ED.

Continuing with the timeline of events, Rakesh Wadhawan and his son Sarang were taken into custody on 17th October 2019 due to suspected engagement in money laundering activities. Both are currently under judicial observation.

Regarding this case in point, the ED has already lodged prosecution and two supplementary complaints against them along with 36 other individuals/ entities. Since the beginning of this investigation, ED has managed to provisionally attach assets mounting to Rs 719.11 crore under the provisions of the PMLA, 2002, according to the agency’s official disclosure.

© The Indian Express Pvt Ltd

Originally posted on: 16-03-2024 at 15:24 IST