The Economic Offences Wing of the Mumbai Police on Friday arrested former Punjab and Maharashtra Cooperative Bank Managing Director Joy Thomas in connection with the alleged Rs 4,355-crore scam at the bank, PTI reported. Thomas was summoned to the Economic Offences Wing office in Mumbai and arrested after questioning, a police officer said.
Meanwhile, the Housing Development and Infrastructure Limited directors Rakesh Wadhawan and his son Sarang Wadhawan, who were arrested in connection with the case on Thursday, were sent to police custody till October 9. The authorities had on Thursday seized property worth Rs 3,500 crore in connection with alleged financial irregularities at the company.
A money laundering case has been filed against the board members of the PMC Bank and promoters of HDIL. The Enforcement Directorate also conducted raids at six locations on Friday in connection with alleged financial irregularities at the bank.
HDIL had said in a statement on Tuesday that loans taken from banks including PMC Bank were in the normal course of business, after providing adequate security cover. The group said it was ready to start discussions with PMC Bank to protect the interest of depositors. The real estate firm, replying to queries by stock exchanges, added that its books of accounts have been audited and reflect a true and fair picture of its business.
However, Joy Thomas had written a letter of confession to the Reserve Bank of India on September 21, admitting that the bank misled the RBI for six or seven years due to “fear of reputational loss”. “As the loans outstanding were huge and if these were classified as non-performing assets it would have affected the profitability of the bank... this would have created reputation risk for the bank,” Thomas wrote. “As the HDIL group had a good record of clearing dues with certain delays we continued to report all the accounts as standard accounts.”
“Though some of the accounts were not performing well, it was not brought to the notice of the board... subsequent overdues of various loans were also not reported... concealment of information from board, auditors and regulators was due to the fear of reputational loss,” the letter read.
Now, follow and debate the day’s most significant stories on Scroll Exchange.