The Central Bureau of Investigation has booked two HDIL promoters, Rakesh Wadhawan and his son Sarang, former PMC Bank chairman Waryam Singh, and seven others, on the charge of fraudulently taking loans of over ₹200 crore from Yes Bank.
“Searches have been conducted on the premises of the accused persons at 10 locations in Mumbai,” said a CBI official.
Funds diverted
It is alleged that the promoters and their associates got the loans sanctioned to Mack Star Marketing Private Limited. The funds were diverted to HDIL group entities for repayment of their loans to Yes Bank. The investors were not aware of the malpractice, said the FIR.
Mack Star is a joint venture of Mauritius-based Ocean Deity Investment Holdings Limited (ODIL) and certain privately held Indian companies owned and controlled by the Wadhawans. ODIL held 78.09% share capitals, while HDIL and Mr. Singh, a former chairman of PMC Bank, had the remaining shares, as alleged.
Office building
Mack Star developed an office building in Mumbai, using ₹1,000 crore, in February 2008. While ₹900 crore was used for buying the plot, the rest was spent on construction. The funds were mostly invested by ODIL. It is alleged that the Wadhawans, Mr. Singh and some other directors of HDIL group were appointed members of board of directors in Mack Star.
As the Wadhawans were experienced in developing and managing real estate projects in Mumbai, they along with certain directors appointed by them exercised full control over the day-to-day management and operations of Mack Star from 2008 to January 2019.
The accused persons got six loans amounting to ₹200.3 crore from Yes Bank during 2011-16 in the name of Mack Star without the approval or knowledge of investors. While ₹138 crore was credited to the current accounts of Mack Star, the remaining was directly transferred for the settlement of liabilities.
Also, ₹135 crore was transferred from the Yes Bank accounts of Mack Star to those of HDIL, Privilege Power and Infrastructure Private Limited and Sapphire Land Development Private Limited (all HDIL group entities), on the same dates of loan disbursements.
‘Collusion of auditor’
The FIR alleges collusion of the Mack Star’s statutory auditor, adding that the auditing firm’s two senior partners were close to the Wadhawans.
In January 2016, as alleged, the investors realised that the Wadhawans had taken loans fraudulently and they informed Yes Bank. However, the bank disbursed three instalments of loan amounting to ₹19.60 crore to Mack Star.
Three of the loans amounting to ₹140 crore were sanctioned to Mack Star to meet expenses on the modification, renovation and refurbishment of the newly constructed Mumbai property and for other capital requirements.
