No business, no revenue but at least 16 HDIL-linked firms got PMC loans: Report

An investigation of documents accessed by ‘The Indian Express’ shows how a web of firms, many of them based abroad, linked to Housing Development Infrastructure Ltd (HDIL) and their promoters Rakesh and Sarang Wadhawan, with little or zero revenue, borrowed money from Punjab & Maharashtra Co-operative (PMC) Bank and invested in each other and related companies.

Privilege Oil & Gas Pvt Ltd, promoted by the Wadhawans, invested money into two Mauritius-based firms Sunsara Investments Ltd and Sunshine Overseas Ltd between 2010 and 2014. These foreign subsidiaries of Privilege Oil & Gas are both managed by Abax Corporate Services Ltd, a global advisory, corporate and business service provider, from their office in Ebene in Mauritius, the report said.

“Interestingly, the same office of Abax Corporate Services has also been used to manage several offshore companies that have been named in The Panama Papers and The Paradise Papers investigated by the International Consortium of Investigative Journalists (ICIJ) and The Indian Express,” the report reads.

Privilege Oil & Gas has not conducted any business since 2012-13. It is one of 65 firms directly or indirectly linked to the Wadhawans. The records show that most of these companies have negligible or zero revenue from their operations between 2014 and 2018.

Besides HDIL, PMC Bank gave loans worth Rs 2042.45 crore to at least 16 firms linked to the Wadhawans. Some of them are Privilege Power & Infrastructure Pvt Ltd (Rs 320 crore), Awas Developers and Constructions Pvt Ltd (Rs 145.01 crore), HDIL Budget Home Spaces Pvt Ltd (Rs 120 crore), Privilege Healthcare Services Pvt Ltd (Rs 61.5 crore) and Somerset Construction Pvt Ltd (Rs 239 crore).

Mumbai Police arrested the Wadhawans following the Rs 4,355.46-crore loan fraud at PMC Bank came to light. PMC Bank depositors who number 9,00,000 are struggling to making ends meet after RBI imposed a withdrawal limit of Rs 25,000 over the next six months.

National Herald had previously reported how there is a strong BJP connection to how affairs were being run at PMC Bank. Rajneet Singh, BJP member and son of four-time MLA Tara Singh, was on the board of both the bank and HDIL.