Former chairman Waryam Singh emerges key link in PMC fraud probe
17 October 2019
The Economic Offences Wing (EOW) of the Mumbai Police has arrested Waryam Singh, former chairman of the Punjab and Sindh (PMC) Bank, who the agency has found to be the key person in keeping an ongoing fraud under cover.
“Accused Waryam Singh has played vital role in this fraud and his active involvement has paved a way to keep fraud shielded for a longer span of time. After Waryam Singh’s arrest, he was interrogated in police custody and further interrogated, in view of his involvement in the offence," EoW stated in its application seeking an extension of his custody.
The accused Waryam Singh is also suspected to have accumulated properties during the period of alleged crime and has invested embezzled funds in various activities in order to mask it.
The EOW further stated that the case was registered on the complaint of Jasbir Singh Matta, manager (Recovery Cell of Punjab & Maharashtra bank Co-op Bank Ltd. against Joy Tomas, the ousted managing director of PMC Bank and other officials of PMC bank.
Waryam Singh, who was director of PMC Bank along with other directors, Sarang Wadhwan, Rakesh Wadhwan and other executives of Housing Development and Infrastructure Limited (HDIL) and its group companies and other unknown persons have been accused of committing various criminal acts causing huge loss to the tune of Rs4,335.46 crore to PMC Bank .
“HDIL group of companies are the largest borrower of PMC Bank and they have kept dues to the tune of Rs. 4,335.46 crore unpaid since 2008 until 2019. Joy Tomas, Managing Director and other functionaries including the Board of Directors, executives of the PMC Bank intentionally reported false records of accounts to the Reserve Bank of India (herein after referred as RBI) to suppress the material position of loan accounts of HDIL group of companies," the application stated.
In its Advances Master Indent (details of loan accounts) for the year ended 31 March 2018 submitted to RBI, PMC Bank had replaced 44 loan accounts whose individual balance outstanding were significantly higher (principal outstanding plus interest outstanding) with 21,049 fictitious loan accounts, whose individual balance outstanding was comparatively lower. These accounts were actually not created in the Core Banking Solution of the bank, instead were mere entries in the Advances Master Indent submitted to RBI for the purpose of conducting their inspection for the year ended 31 March 2018. This was intended to camouflage the actual loan accounts of the defaulting borrowers and was done with the full knowledge of its board and executives, including managing director Joy Thomas.
“The actual financial position of the bank was camouflaged, and the bank deceptively reflected a rosy picture of its financial parameters. Thus, encouraging more depositors to open accounts with the bank, to their detriment. and also the fabrication/falsification has affected the depositors’ interest adversely," it added.
Waryam Singh, who was one-time director on board of HDIL and later on was chairman of PMC Bank, could not provide logical replies on outstanding dues of HDIL since the year 2013 or as to why accounts of HDIL were not declared as NPA by the bank of which he is the chairman, police said.
"Accused Waryam Singh has not co-operated during the course of his interrogation and he is changing his versions in respect of his role that he was forcing the then managing director of PMC Bank Joy Thomas to cover up the NPA accounts of HDIL accused persons. This is the case of huge monetary loss to PMC Bank caused by ill activities of bank officials and business tycoons of HDIL in which accused Waryam Singh is the bridge between them. Therefore ascertaining his exact role, his custodial interrogation was required to explore all dimensions of this case which is still incomplete," it added.
Waryam Singh has emerged as the main entity who acted as the link between PMC Bank and HDIL accused persons and has played active role in committing the offence, according to the police. Since the registration of the offence Waryam Singh has been absconding and was not traceable. He was traced on 5 October and arrested in due course of investigation by following guidelines of the Supreme Court.
"Investigation conducted so far has revealed active involvement of accused Waryam Singh in the offence. Investigation yielded details of malpractices applied by accused Waryam Singh in the operations of PMC Bank as a chairman. It has also brought forth the instances of abusing his official position as chairman to facilitate the said fraud," the EoW said.
“Singh is not furnishing factual details of fraud during interrogation and he is trying to divert the investigation, However, enquiries into the affairs of PMC Bank by RBI officials have revealed many flaws in the functioning which reflect criminality of the said accused Waryam Singh," the police added.
Waryam Singh has been sent on judicial custody till 23 October. The EOW had sought police custody.