PMC Bank fraud

HDIL

Rakesh Wadhawan

Top: Winner of a 2011 derby, Moonlight Romance, being led by co-owners Rakesh Wadhawan and former PMC Bank chairman Waryam Singh; (above left) Salman Khan, Sonakshi Sinha and Bobby Deol with the Dewans in 2018; (above right) Karan Johar and Sunny Dewan at a 2010 fashion week sponsored by HDIL

PMC Bank chairman Waryam Singh

Illustration by Jayanto Banerjee

Rakesh Wadhawan’s sprawling mansion in Awas, Alibaug; actor Amrita Arora and husband Shakeel Ladak at the property (Photos by Raju Shinde)

ByArrested in connection with the, realtors Rakesh and Sarang ‘Sunny’ Wadhawan were once the darlings of Mumbai’s film and social circles, with their jets, mansions and superyachts.Sarang Wadhawan, MD of Housing Development and Infrastructure Limited (), brought in his 42nd birthday on Saturday. But instead of the usual, lavish celebrations, attended by the who’s who of Bollywood, Sarang — known to almost everyone as Sunny — spent his big day surrounded by the police. On Friday, the real estate tycoon and his father,, were arrested on charges of cheating, criminal conspiracy and criminal breach of trust in connection with the financial irregularities at the Punjab and Maharashtra Co-operative Bank (PMC).The bank had extended loans to the beleaguered HDIL and related entities, to the tune of Rs 6,226 crore — roughly amounting to 73 per cent of the bank’s total assets — but the borrowers defaulted, leading to a spiralling crisis that has now hit the bank’s 17 lakh depositors. As information about irregularities surfaced, the Reserve Bank of India ordered PMC Bank to stop doing business for six months.It also capped withdrawals (at Rs 1,000 at first, then raised to Rs 25,000 on Thursday), throwing the lives of depositors into disarray. Many of them have their life’s savings tied up with the bank, and now have to watch every rupee they spend. But their hard-earned money, it appears, has long supported the Wadhawans’ uber-rich lifestyle: private jets, weekly parties on yachts, a fleet of luxury cars, gun-toting bodyguards, sprawling mansions in places like Alibaug, Lonavala, Dubai, and in cities in the US, UK and Canada, among other things, according to sources.While several reports suggest that the fraud dates back to 2008, the story really starts in the mid-1990s, when the Maharashtra government passed the Slum Rehabilitation Act (SRA). This allowed the Wadhawans — owners of Dewan Housing Finance Limited (DHFL), then a small NBFC — to leverage their connections with people like Vasai-Virar strongman Jayendra ‘Bhai’ Thakur to land lucrative SRA projects. Rakesh Wadhawan founded HDIL in 1996, and by 2009, at age 57, he had cracked into the billionaire’s club with an estimated net worth of $1.6 billion. The company also went through a process of restructuring around this time. While Rakesh and Sarang took charge of HDIL, his brother Rajesh and his sons, Kapil and Dheeraj ‘Baba’ Dewan — the Wadhawans use the surname ‘Dewan’ socially — took over DHFL.“By this time, they had already become famous for their flamboyance,” says a real-estate industry insider. In 2007, Sunny and his wife Anu reportedly flew down a Chinese circus for their daughter Sara’s first birthday party, and several Bollywood bigwigs were in attendance with their kids: Shah Rukh Khan with son Aryan; Malaika and Arbaaz Khan with Arhaan; Seema and Sohail Khan with Nirvaan; Sussanne Khan with her son Hrehaan Roshan; as well as Sanjay and Maheep Kapoor, Maureen and Celina Wadia and many others from the highest strata of Mumbai’s social circles. The celebrations didn’t end with the cake cutting of course — a ‘club area’ had been created in anticipation of a post-party party for the grown-ups.This wasn’t the first grand bash the Dewans had thrown, and it would certainly not be the last. The internet is bursting with photographs of celebrities at the Dewans’ various dos through the years. Sunny and Anu even threw a massive Christmas party in 2018 — though industry insiders say HDIL had already been bleeding for years by then. “Their empire developed cracks around 2013, when Mumbai International Airport (MIAL) Limited terminated HDIL’s contract for the redevelopment of slums around the airport,” says a source. “That, followed by a change in government in 2014, a flagging economy and the ensuing liquidity crunch… given all of these things, one could see that a collapse was imminent.”The family simply doesn’t believe in being low-key,” says a politically-connected source. “Everyone has seen Baba Dewan driving around Bandra in his Hummer, followed by a convoy of cars, which includes his police detail as well as his Israeli bodyguards.” Meanwhile, Rakesh and Sunny’s bodyguards, sources say, are from South Africa and Russia.Sunny’s children go everywhere with security guards, too. When they attend classmates’ parties, the guards do a recce of the venue first. As an industry insider explains: “Because of the people you have to deal with when it comes to SRA projects the security can be justified. But the fact that they chose to hire foreigners probably has something to do with making a statement. It makes you view the Wadhawans as powerful, and that can intimidate competitors. Perception is, after all, nine-tenths of the game.” The family was also close to a certain senior IPS officer and other top cops.Sunny’s ‘toys’ are also legendary. In 2008, according to a report, his fleet of cars included a Land Rover, a Bentley, two Rolls-Royces – the Phantom and the D8 coupe – a Lamborghini, a Porsche and a Ferrari F430 Modena. These were just a few of the cars that filled the underground car park of the Wadhawan mansion the family occupies, in Union Park, Khar.Incidentally, the Wadhawan bungalow has been designed by actor and author Twinkle Khanna, who is said to be one of Anu Dewan’s closest friends.The Wadhawans — or Dewans, as they are better known — also own two private aircrafts, a Dassault Falcon 2000 and a Bombardier Challenger 300, which are listed as belonging to a company, Privilege Airways, they apparently own and had set up in 2006. Estimated to have cost over Rs 300 crore, the business aircrafts are fitted with luxe interiors and have the capacity to accommodate between eight and 10 passengers. Both were also frequently loaned out to politicians and celebrities, allegedly, to win favours. Incidentally, disgraced, who functioned as a conduit between the Wadhawan and some politicians, and was arrested late Saturday evening, was a frequent flier on the Falcon 2000. According to a source, Sunny also picked up a Ferretti, an 88-foot yacht, for a cool $8.5 million (over Rs 24 crore), and the vessel is apparently on its way to the Maldives right now, a source claims. But until recently, the yacht, which was usually moored off the Gateway of India, was the venue for regular celebrations. “At one point, there were parties on the boat almost every weekend,” adds the source.The boat was in all likelihood also used to ferry the family to their weekend home in Alibaug. A high net worth individual, who has attended a party at the Wadhawan property in Awas village, describes it as massive. “The structure alone is easily over 20,000 sq ft,” he says, referring to the palm tree-fringed bungalow that allegedly has 22 bedrooms and was at the centre of a row three years ago.In March 2016, Mirror reported that the Wadhawans’ Alibaug neighbours — both the moneyed as well as villagers — had complained that a bridge that led directly to the Wadhawans’ property, was built on public land without securing the necessary permissions. And that this was also an ecological disaster waiting to happen. Though the Wadhawans claimed they had nothing to do with the bridge at first, they made every effort to keep it from being pulled down. The tehsildar of Alibaug, Prakash Sakpal, refused to relent, however, and ultimately, the structure demolished in April 2016.That Sakpal could do this was a sign of the Wadhawans’ waning power, a politically-connected source points out. “The fact that they [Sunny and Rakesh] have been arrested now is also proof that they are finished,” the source says.“There was a time when they were untouchable. [Rakesh] Wadhawan could drive his car right into the MHADA office and occupy the parking spot reserved for the vice president, without anyone saying anything. He could pick up the phone at any hour, and reach out to a politician on any rung of the political ladder. Today, no one will take their calls.” He adds that the family ran out of luck — and saw their wealth diminished as well — some seven years ago.In fact, their troubles are mounting. Last month, MIAL published a public notice, alerting potential buyers that Privilege Airways owes a sum of Rs 2.04 crore towards the Bombardier – this excludes interest on unpaid landing and parking charges that have accrued since July 2012. The notice was published after MIAL learnt that Privilege was scouting for buyers for the jet.Looking back, it seems plausible that financial troubles prompted Rakesh Wadhawan to suddenly exit the world of horseracing in 2013 — a world he had entered with characteristic pomp just five years earlier. According to senior racing journalist (and Mirror columnist) Usman Rangila, Wadhawan once owned about 100 horses, collectively valued at over Rs 20 crore. “Of these, some 70 were kept in stables at the Royal Western India Turf Club,” says Rangila. A source alleges that this brief foray was really aimed at currying favour with the RWITC management committee who, Wadhawan hoped, would support his efforts to develop a portion of Mahalaxmi Race Course into a commercial venture.If this was indeed his motive, it eventually failed to deliver. Not only did the venture not come about, but the big investment in horses did not yield returns either. “By a conservative estimate [Rakesh] Wadhawan would have had to pay over Rs 15 lakh a month to maintain his large string,” says Rangila. “He did own a couple of winners, but the prize money they brought in wasn’t even enough to pay the training bill.” In a 2011 photograph on RWITC’s Facebook page, Rakesh Wadhawan can be seen leading his McDowell’s Signature Indian Derby winner Moonlight Romance. In the picture, too, is the horse’s co-owner — who else but Wadhawan’s old friend, PMC Bank’s Waryam Singh. The Enforcement Directorate has registered a criminal case of money laundering against Singh in the PMC Bank case. As the HDIL ship begins its descent into the murky waters of economic fraud, it’s no longer clear if the Wadhawans’ fortunes will, in fact, sink or swim.Contributed byand