Joy Thomas, former Managing Director of PMC Bank, was arrested on Friday evening by the Economic Offences Wing (EOW) of the Mumbai Police for alleged financial irregularities when he was at the helm of the bank.

Rakesh Wadhwan, Chairman, and Sarang Wadhwan, Managing Director of Housing Development Infrastructure Ltd (HDIL), were also remanded in police custody till October 9. Wariyam Singh, Chairman of PMC Bank and an accused in the case, is still at large.

The Wadhwans were presented in the Esplanade court on Friday. According to a remand application reviewed by BusinessLine , “It is the case of a huge financial fraud” and the Wadhwans “have played an active role in the commission of offence, and therefore, their custodial Interrogation is necessary in order to trace their operations carried out of borrowings from PMC Bank.”

The Wadhwans took loans between 2008 and 2019, causing a loss to the tune of ₹4,335.46 crore to PMC Bank by committing various criminal acts, the EOW application added. It further stated the funds availed by HDIL from PMC Bank have not been utilised for the designated purpose.

“Initial scrutiny of financial statements indicates diversion and misappropriation of funds in large amounts and it requires to be interrogated with both the accused in order to prevent further financial catastrophe,” the remand application added.

An EOW official said: “The quantum of the entire loan will be ascertained once the forensic audit is over. Evergreening is a very common phenomenon, and this is something we are noticing in this case as well.”

The Wadhwans’ lawyer argued in court that they were conscious of the extent of the alleged scam and that the primary issue at this stage is the interests of the depositors. He further added that they were fully cooperating with the authorities and voluntarily gave their passports to EOW on Thursday before the arrests.

At the time of the arrest, the EOW had attached assets of HDIL and the Wadhwans’ worth ₹3,500 crore. The First Information Report (FIR) had named the Wadhwans, Thomas and Warayam Singh along with other directors.

The EOW’s remand statement further alleged that Thomas and other functionaries, including the Board of Directors and the executives of PMC Bank, intentionally presented false records and accounts to the Reserve Bank of India to suppress the material position of the loan accounts of the HDIL group.

Another source added that a few women employees in Thomas’ team told him to declare the accounts as Non Performing Advances. They had also warned him that if he did not inform the RBI, they would have to do so. Since Thomas did not inform the officials himself, the employees did.

Also read:PMC Bank: ED raids 6 locations; slaps money-laundering charge

 

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