PMC Fraud: Court Gives Nod To Sell Two Jets, Yacht Of Wadhawans
Customers read a notice issued by RBI on the shutters of a PMC Bank ATM in Mumbai. (Photo: BloombergQuint)

PMC Fraud: Court Gives Nod To Sell Two Jets, Yacht Of Wadhawans

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A court in Mumbai has allowed the Reserve Bank of India-appointed administrator for the Punjab & Maharashtra Cooperative Bank to sell two airplanes and a yacht belonging to Housing Development & Infrastructure Ltd. group firms owned by Rakesh Wadhawan and his son Sarang, the prime accused in the Rs 4,355-crore scam at the cooperative lender.

Chief Metropolitan Magistrate RK Rajebhosale on Monday allowed the sale of two aircraft- Falcon 2000 (VT-HDL) and Challenger 300 (VT-PIL)- and one yacht (Ferreti 881 HT).

The administrator had moved the court, seeking its direction to sell the movable assets attached by the probe agencies in connection with the scam at the PMC Bank.

The administrator, represented by advocate Ramesh Dube-Patil, told the court that due to the restrictions, the depositors cannot withdraw more than the amount prescribed by the apex bank.

Also read: Seeking Their Money, PMC Bank Depositors Protest Again

"If the amount, by selling the properties, comes to the loan account of the accused, it would be helpful to the depositors to some extent," the administrator said.

The administrator also submitted that mortgaged and hypothecated assets of the accused are inadequate to satisfy the loan along with the due interest.

Accepting the argument, the court allowed the sale of two aircraft and one yacht.

"Amount coming from the auction shall be credited to the loan account of the HDIL and its group companies," the court said.

Rajebhosale directed the administrator to submit a detailed report of auction and its procedure before the court immediately after the sale.

The court also asked Mumbai Police's Economic Offences Wing, which is probing case, to make proper panchnama of the properties before auction and submit before it.

The Enforcement Directorate, which is probing the scam along with the EOW, has attached the movable properties of the Wadhawans.

These properties comprise 15 luxury cars, a seven- seater speed boat, besides two aircraft and yacht belonging to HDIL and its promoters.

The ED had earlier told the court that it did not have any objection for disposal of two airplanes and a yacht by the PMC administrator.

However, with regards to the sale of other seized items, the ED had said that these properties are subject to sale only on confirmation by the adjudicating authorities as per the provisions of the Prevention of Money Laundering Act.

The Wadhawans had also given their consent to dispose of the movable assets through their letter dated Oct. 16.

So far, nine persons have been arrested in connection with the scam, including three top officials of the bank and auditors.

According to the EOW, the PMC Bank management, in cahoots with the Wadhawans, concealed from the banking regulators' scrutiny huge loan defaults by HDIL group firms.

Over 70 percent of the bank's advances went to HDIL group, which led to a huge crisis when the realty group defaulted on repayment, the EOW had said.

The RBI had on Sept. 24 imposed operational curbs on PMC Bank and appointed an administrator following detection of alleged financial irregularities.

The ED case of money laundering was based on the FIR registered by the EOW.

Also read: Sell Our Assets To Pay Off PMC Bank’s Dues, Wadhawans Write To RBI

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