Former Managing Director of Punjab and Maharashtra Cooperative (PMC) Bank has been sent to police custody for 12 days till October 17 after he was produced in the Mumbai magistrate court on Saturday in connection with the bank fraud case.
Joy Thomas, the former managing director of PMC Bank, was arrested by SIT (Special Investigation Team) of Mumbai Police’s Economic Offences Wing (EOW) on Friday evening.
The EOW on Thursday had arrested two directors of the Housing Development and Infrastructure Ltd (HDIL) (HDIL)– Sarang Wadhawan and Rakesh Wadhawan– after registering a case on Monday for allegedly causing loss to the tune of Rs 4,355.43 crore to the bank.
The prosecution informed the court that the investigating agency needs at least 14 days custodial remand to interrogate Joy Thomas since he is one of the prime accused who had connived and conspired with HDIL directors.
It is alleged that Joy Thomas had directed employees of the bank to create false sheets showing fictitious accounts to hide the loans borrowed by HDIL which resulted in thousands of crores of NPA (Non-performing assets ).
The defence counsel appearing for Joy Thomas argued that custodial interrogation was not needed because the security provided against the loan is more than 2.5 times the credit facility extended to them.
The defence counsel said that there is a procedure for granting loans and it is not that Joy Thomas had decided and reimbursed the loans. If such action was taken, then even MDs of banks like State Bank of India (SBI) would be behind bars.
It was only after Thomas approached the Reserve Bank of India (RBI) and informed them about the loan turning into a gigantic NPA did the apex banking body came to know about the issue. Joy Thomas had asked them for remedy or measures to be adopted in the scenario, the defence counsel said.
The counsel also stated that the custodial interrogation is not needed since it was Thomas who had gone to the EOW to cooperate. He claimed that there is no mention of any fictitious accounts being created.
Countering the defence, the prosecution informed the court that the complaint by the RBI does mention about the fictitious accounts and the role of MD and other bank officials.
“The actual loss to the bank is yet to be ascertained and will take another 20 days or so for the RBI administrators to calculate it,” informed the investigation officer to the court.
The money deposited in the bank belongs to several thousand poor labourers and shoe-shiners who had toiled day and night and deposited their savings in the bank, the investigating officer told the court.
Meanwhile, the Enforcement Directorate (ED) investigating the PMC bank case has seized property and jewellery totally worth around 100 crores belonging HDIL directors Rakesh Wadhawan and Sarang Wadhawan.
Sources in the agency said that around 12 luxury cars belonging to the Wadhawans had been seized along with a private jet and jewellery worth Rs 60 crores.
The ED has also found a high-end yacht belonging to the Wadhawans anchored in the Maldives for which they have initiated procedures to seize and bring it to Mumbai.
The ED had registered an Enforcement Case Information Report (ECIR) on Friday and launched searches across Mumbai and other areas. Around five to six properties which haven’t been mortgaged to any other banks belonging to the HDIL have been identified and would be attached in the near future by the agency.
Moreover, around Rs 10 crore deposits have been found in bank accounts and fixed deposits of the bank’s chairman Waryam Singh. Waryam Singh on Saturday informed the EOW via a letter that he will surrender by Saturday evening.