Mumbai / Ex-PMC Bank chairman bought Rs 400-crore biz hotel in Amritsar

Waryam Singh, the arrested former chairman of Punjab and Maharashtra Co-operative (PMC) Bank, owns a Rs 400-crore business hotel in Amritsar which he purchased from his personal earnings from the alleged Rs 4,355-crore fraud, an investigation by Mumbai Police’s Economic Offences Wing (EOW) has revealed.

Singh is one of the four main accused in the alleged PMC Bank fraud, and was arrested on October 5. The other accused are the bank’s former managing director Joy Thomas, and the promoters of Housing Development and Infrastructure Ltd (HDIL), Rakesh Kumar and Sarang Wadhawan. A court on Monday extended their police custody by two more days.

An EOW officer, who did not wish to be named, told HT on Monday that the department’s probe has revealed that the 68-year-old Singh also owns a 69-acre parcel valued at Rs 2,500 crore next to Citizen Hotel in the upscale Juhu beach area. This land is under dispute with a government agency and was originally purchased in the name of Singh’s grandfather. A second EOW official independently told HT that Singh also owns a business hotel at Grand Trunk Road in Amritsar, Punjab, which he handed over to hospitality group Lemon Tree, for day-to-day operations. The EOW official, who is part of the PMC Bank investigation, said Singh bought this property “using a frontman named Manmohan Ahuja”.

The hotel was purchased in his son’s name and the current market value of the property could be anywhere between Rs 400 and 500 crore, the officer said. He added that Mumbai Police officials are trying to ascertain Ahuja’s location.

This officer said that Singh had made many more real estate investments. “He had also bought properties in Haryana and Himachal Pradesh from what we think is money earned in the fraud,” the officer said. As reported in HT earlier, EOW officers had described how Singh and some of his family members had invested in businesses in the United States. “These investments are also under scrutiny,” the officer said.

A third officer HT spoke to said that in their questioning of the bank’s former managing director Joy Thomas, the accused confessed to channelling PMC Bank money through hawala accounts in Dubai and routing it back into the bank via a person named Mehta. The EOW has been unable to find out Mehta’s first name, but said that this Dubai-based person is suspected to have used the money to increase his own shareholding in PMC Bank. The EOW officer was also unable to explain how Mehta was involved in the fraud or why he wanted to increase his shareholding, but said they might call him for questioning to understand his role. Mehta is not a suspect at this moment, the officer, who is with the EOW’s Special Investigation Team (SIT), said.

“Thomas used to debit money from HDIL’s company accounts and send the cash to Dubai through hawala channels,” the officer said. “Singh and Thomas worked in tandem.”

The first officer said it was bank chairman Waryam Singh who forced Thomas to hide HDIL’s non-performing assets (NPAs). “Thomas then cloaked HDILs 44 bad loan accounts with nearly 21,000 fictitious accounts, most of which were dormant,” the officer said.

These revelations were made by the four accused during their interrogation, EOW officers told HT. “Thomas was working on the instructions of Wadhawans and Singh,” the SIT officer said. “We confronted all four during the interrogation, but instead of defending each other or closing ranks, they blamed each other. It was obvious to us that Thomas was not just following instructions, but was making enough money on the side to buy nine apartments and a shop in Pune.”

Since EOW will exhaust its 14-day police custody of the four accused later this week, it plans to question all of the 12 directors of the PMC Bank board, including Ranjeet Singh, the son of BJP MLA Sardara Tara Singh. A senior EOW official said HDIL’s loan proposals were never discussed during the bank’s board meetings. “Our probe has revealed that among the bank’s personnel only Joy Thomas and Waryam Singh knew what was going on, while from the HDIL side, only Rakesh and Sarang Wadhawan knew.

Meanwhile, police will also question Thomas’ second wife, who co-owns the Pune properties with him. Thomas had married her after converting to Islam and changing his name to Junaid Khan, an EOW submission in the court on Monday said. His first wife has filed for divorce, and the first hearing is slated for October 23.