With Kapil Wadhawan’s arrest, the family is now accused of scams worth over a billion dollars

• The Enforcement Directorate today arrested Kapil Wadhawan the promoter of Dewan Housing Finance Ltd for reportedly diverting over ₹2,100 crore.
  
• But this isn’t the first case to blow the Wadhawan, who were once the limelight of all the glittery Bollywood parties in Mumbai.
  
• It was all smooth sailing until it came to light that Punjab Maharashtra Cooperative (PMC) Bank had lent a lot of money to the Wadhawans and it wasn’t coming back to bank.
  

The Enforcement Directorate today arrested Kapil Wadhawan the promoter of Dewan Housing Finance Ltd for reportedly diverting over ₹2,100 crore. Wadhawan will be in custody until January 29 and will have to undergo legal proceeding under the Prevention of Money Laundering Act. (PMLA).

But this isn’t the first case to blow the Wadhawan, who were once the limelight of all the glittery Bollywood parties in Mumbai.

Here’s a look at Wadhawan Empire and its fall:

The Wadhawan Empire

From the biggest fleet of Rolls Royce Phantoms in India to the luxury business jet Falcon 2000, the high-flying Wadhawans owned the most fabulous machines the world of hijinks has ever seen.

[embed image of Rolls Royce Phantom]

Rakesh Wadhawan — the billionaire promoter of DHIL — was once worth ₹1 billion in 2010. Sarang Dewan — son of Rakesh Wadhawan and VC/MD of Housing Development & Infrastructure— along with his wife Anu used to host posh bollywood parties from Karva Chauth to Christmas.

It was all smooth sailing until it came to light that Punjab Maharashtra Cooperative (PMC) Bank had lent a lot of money to the Wadhawans and it wasn’t coming back to bank.

PMC Bank: A billion-dollar hole in the banking system

The crisis-ridden bank's annual report for 2018-19 nowhere mentions exposure to any real estate firm and it only talks of MSME lending and NPAs at 3.76%.

Two directors — Rakesh and Sarang Wadhawan — of HDIL that set off the massive crisis at the PMC Bank by defaulting on loans worth nearly ₹6,500 crore have been arrested. They were arrested by the Economic Offences Wing of the Mumbai Police.

According to the complaint, HDIL and its group companies were the beneficiaries of 44 loans or 73% of PMC's total loan book size of ₹8,880 crore - a mammoth violation of regulations which forbid banks from handing out such a large proportion of cash to one sector, let alone a single firm.

The Iqbal Mirchi case: A fraud of ₹2186 crore

The agency has filed a criminal case against Mirchi, his family members and others to probe money laundering charges for alleged illegal dealings in purchase and sale of five properties — Ceejay House, Sahil Bungalow, Rabia Mansion, Marium Lodge and Sea View at prime Worli locations in Mumbai.

"Kapil Wadhawan, being chairman and managing director of Dewan Housing Finance Ltd (DHFL), had visited London along with a city-based real estate broker to meet Iqbal Mirchi in 2010. He has been instrumental in siphoning off huge amounts of money as part of the illegal deal between Mirchi and the Wadhawans," the ED said in its remand note.(hyperlink)

According to media reports, Kapil Wadhawan reportedly purchased shares in five shell companies — Faith Realtors Private Limited, Marvel Township Private Limited, Able Realty Private Limited, Poseidon Realty Private Limited, and Random Realtors Private Limited — to give away over ₹2,100 crore loan from DHFL.

ED is said to believe that Wadhawan loans siphoned funds from DHFL to shell companies who later gave loan to Sunblink Real Estate which was linked with Iqbal Mirchi — a dead drug lord and the brother of fugitive gangster Dawood Abrahim.

(With Agencies)
See also:
The $2.6-billion Rakesh Jhunjhunwala, called the ‘Warren Buffett of India’, has to protect an image that was built over 35 long years