PMC bank scam: SC stays release of HDIL promoters from jail

New Delhi, Jan 16: The Supreme Court on Thursday has stayed the release of HDIL directors, Rakesh Wadhawan and Sarang Wadhawan, accused in the case, from Mumbai Arthur Road jail.

Solicitor General Tushar Mehta mentioned the matter before a bench headed by Chief Justice S A Bobde and said the Punjab and Maharashtra Cooperative (PMC) bank scam involved Rs 7,000 crore and the high court had on Wednesday passed a very "unusual order" while hearing a public interest litigation (PIL).

Mehta told the bench, also comprising justices B R Gavai and Surya Kant, that the father-son are presently lodged under Arthur Road jail in judicial custody and if they are shifted to their residence as per the high court's order, it would be like bail to them.

The high court had on Wednesday set up a three-member committee for valuating and sale of encumbered assets of Housing Development and Infrastructure Limited (HDIL) to expeditiously recover dues payable by her firm to PMC bank.

The high court had directed the superintendent of Arthur Road jail to shift both the accused to their residence under the supervision of two jail guards to ensure their cooperation to the committee.

The high court had passed the order while hearing a PIL seeking direction for expeditious disposal of HDIL assets and properties attached by the Economic Offence Wing and the Enforcement Directorate and repaying PMC bank depositors at the earliest.

The fraud at PMC Bank came to light in September last year after the Reserve Bank of India discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt HDIL.

According to RBI, the PMC bank masked 44 problematic loan accounts, including those of HDIL, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

Mumbai Police's Economic Offences Wing and the ED registered offences against senior bank officials and HDIL promoters.