A former director of the Punjab and Maharashtra Bank (PMC) was arrested on Monday by Mumbai police's Economic Offences Wing (EOW) in connection to a multi-crore scam. Rajneet Singh, the ninth arrest in the case, is the son of former BJP MLA from Mumbai's Mulund Tara Singh.
Rajneet Singh was interrogated about loans granted to HDIL and questioned on what steps were taken to recover the company's long pending dues as he was part of the recovery committee in the bank. He will be produced in a holiday court tomorrow.
"He was interrogated regarding loan facilities awarded by PMC Bank to HDIL group companies and their long pending dues and what efforts were made to recover/regularize the said dues, however he provided unsatisfactory and unconvincing explanations and accordingly his active involvement in the offence in revealed and ascertained," EOW said in a statement.
The crisis at the cooperative bank was set off after real estate firm HDIL defaulted on loans from PMC Bank worth Rs 4,355 crore. The EOW suspects a nexus between some of the accused and HDIL leading to appointment of administrator and restrictions on withdrawal of funds.
A number of auditors of the bank have been arrested in the case including two statutory auditors, Jayesh Sanghani and Ketan Lakdawala. They are suspected to have played a key role in covering up the irregularities in the bank.
Earlier, the EOW had arrested three top bank officials and two promoters of HDIL -- Rakesh and Sarang Wadhawan - in the case.
The alleged scam has impacted over 16 lakh investors; many deaths and protests have followed after the bank imposed curbs on cash withdrawal.
More than two dozen cooperative banks are now under the administration of the Reserve Bank of India (RBI), but PMC Bank - with deposits of Rs. 11,620 crore as of March 31 - is by far the largest.