Mumbai Police, RBI administrator discuss auctioning of HDIL promoters’ assets

MUMBAI: The Economic Offences Wing of Mumbai Police is keen to explore the possibility of auctioning at least 18 assets of ‘depreciating value’ seized from HDIL promoters arrested in connection with Punjab & Maharashtra Cooperative Bank fraud case.The city police recently discussed the matter with JB Bhoria, the Reserve Bank of India-appointed administrator of the bank, saying the proceeds raised from the auctions could be infused in the bank and be made available to the beleaguered depositors on a pro rata basis, at least two sources told ET.The move will help provide quick relief to the depositors even as the probe into alleged criminal conspiracy between some officials of PMC Bank and Housing Development Infrastructure Ltd (HDIL) promoters Rakesh and son Sarang Wadhawan is underway, they said.“A sizeable chunk of the depositors are from the lower income group and an early auction will ease their financial load,” one of the sources said. “We are awaiting clarity from RBI administrator on it.”Bhoria refused to comment.An RBI spokesperson in a text reply to ET said, “Only the administrator can say, we will not have any information on this.”The Wadhawans have already given their consent to selling the 18 attached assets, including two private jets, a speed boat and a fleet of high-end cars. In a letter dated October 16 to the finance ministry, RBI and probe agencies including EOW and Enforcement Directorate (ED), they requested the agencies to monetise the attached assets whose value could depreciate at “fair market value”.“We further give our unconditional consent for the appropriation of the money received from the sale of these assets to be adjusted and appropriated towards the principal loan amount procured by us and the respective companies,” the letter said. “We undertake and assured to extend full cooperation and assistance in the process.” ET reviewed a copy of the letter.Probe agencies expect to raise a few hundred crores from the sale.The persons cited earlier said the auction will have to be carried under certain provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002 that allows banks and financial institutions to auction residential or commercial properties of defaulters to recover loans.“In this case, since the accused has already agreed to give their consent to the auction, the list of the same could be provided to the administrator and the auction can be carried out as per the provisions of the Act,” one of the officials said.The fraud at PMC Bank came to light after RBI discovered that the bank had allegedly created over 21,000 fictitious accounts to hide over Rs 4,300 crore of loans extended to almost-bankrupt HDIL.A manager of the bank on behalf of the RBI-appointed administrator then filed a case with the EOW. HDIL promoters, suspended PMC Bank managing director Joy Thomas, its former chairman Waryam Singh and director SS Arora have been arrested by EOW in the course of the probe. While EOW is probing the alleged criminal conspiracy between the promoters and accused bank officials, ED is probing the allegations of money laundering. The Wadhawans are currently in judicial custody and are lodged at Mumbai’s Arthur Road jail.

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