NEW DELHI: While another huge banking scam is unfolding with a bang, a top real estate company’s functionaries have been arrested. Rakesh Kumar Wadhawan and Sarang Wadhawan of the Housing Development and Infrastructure Ltd (HDIL) have been detained in connection with alleged financial irregularities in the company.
Rakesh is executive chairman of the HDIL, while Sarang is the managing director. Their assets worth Rs 35,000crore have been frozen by the government in a quick action.
The government earlier made sure the two do not leave the country by air or sea. HDIL is linked to the crisis at Punjab and Maharashtra Cooperative (PMC) Bank, which has provided a huge amount by way of loans to the company. PMC’s exposure to HDIL group is nearly 73 per cent of its total loan book size of Rs 8,880crore as of September 19, 2019.
In an alleged confession letter to the RBI, the bank’s suspended managing director Joy Thomas had accepted giving loans to realty developer HDIL and its related entity to the tune of Rs 6,500crore. This was done without informing the board members. Of late, HDIL is developing real estate projects in Kurla, Nahur, Mulund and Palghar, with a residential portfolio of 86.22 lakh sq ft under construction.
HDIL has a land reserve of around 193million sq ft as on March 31, 2019, with 90 per cent of its land reserves in Mumbai Metropolitan Region, as per its 2018-19 annual report. Incorporated in 1996, Mumbai-based HDIL mainly focused on real estate development in the Mumbai Metropolitan Region, which included clearing slum land and rehabilitating slum dwellers.
The main source of revenue of HDIL, for long, has been selling of development rights to other property developers, after developing slum lands. –Agencies, IHN-NN