ED focuses on HDIL’s investments in UK, UAE
The agency is focusing on assets that were procured by HDIL, an accused in the case, since 2008.
The agency is focusing on assets that were procured by HDIL, an accused in the case, since 2008. Investigators are verifying information, including financial records, at their locations in the United Kingdom (UK) and United Arab Emirates (UAE), sources said.
HDIL is accused of causing a loss of Rs 4,335.46 crore to PMC Bank by failing to pay loans of an equivalent amount, drawn since 2008, from the latter till March this year. The outstanding dues of HDIL, which it owed to PMC bank, allegedly ballooned to Rs 4, 635.62 crore in August this year, sources said. “The suspicion is that a significant part of the unpaid loans were diverted to non-specified purposes and misappropriated,” a source said. “Funds from the unpaid loans that were diverted into acquisition of assets, whether movable or immovable are proceeds of crime in the case. Such assets will get attached,” the source said. A yacht, that is located in Maldives, is likely to get attached soon, according to the source.
“Our preliminary search for overseas assets that are proceeds of the unpaid loans is focused on the UK and UAE currently, but will expand to other countries as we acquire further information from sources including witnesses,” the source said. Apart from HDIL’s overseas assets, its domestic assets, whether held by its promoters who are accused in the case or ‘gifted’ to individuals including politicians, are also under the agency’s scanner, sources said.
The ED’s case is based on a First Information Report registered by the Economic Offences Wing (EoW) of the Mumbai Police. The EoW is investigating if some senior accused officials of the PMC Bank had allegedly extended irregular loans worth several thousand crore to private firms, including HDIL, while keeping information on the same from the Reserve Bank of India (RBI) in a fraudulent manner. The bank had allegedly hid information in their “regulatory reporting” to the RBI about the loans worth Rs 4,355.46 crore that had been given to HDIL firms. The bank had instead allegedly replaced these loan accounts with fictitious accounts. In all, the bank had allegedly replaced information on 44 loan accounts with 21, 049 fictitious loan accounts.
According to the bank’s version submitted to the Reserve Bank of India (RBI) last month, the facts on alleged irregularities related to the bank’s credit disbursal to HDIL in violation of credit norms began getting misreported increasingly since 2017, according to sources. From 2017, regulatory authorities began making exhaustive queries about the bank’s loans. “As a result, the stressed legacy accounts of groups like HDIL were replaced with dummy accounts to match the outstanding balances in the balance sheet, as per the bank’s version to RBI,” the source said.
If the bank had taken timely action to recover the loans from HDIL, instead of allegedly hiding information on unpaid loans in their regulatory reporting to the RBI, it would not have ended up with losses to the tune of Rs 4,335.46 crore, the official told Mirror. “According to the bank’s accused officials, some of the large accounts were not reported to RBI from 2008 because of a fear of a loss of reputation,” the official said. “In 2011, the bank’s exposure to HDIL was up to Rs 1, 026 crore,” the source said. The case investigators are verifying whether at that stage, the bank had still not classified the accused group’s loan accounts as Non-Performing Assets due to concerns that no interest could be charged on them as a result thereof, the source told Mirror. Also HDIL had allegedly promised to clear its dues and provided adequate security to the bank, the source said.