Crisis-hit Housing Development and Infrastructure Ltd (HDIL) on Tuesday said that loans taken from banks including Punjab and Maharashtra Cooperative Bank were in normal course of business after providing adequate security cover and that it is ready to start discussion with the bank to protect the interest of depositors.
The Mumbai Police on Monday filed a case against the former bank management and promoters of HDIL in the Punjab and Maharashtra Cooperative (PMC) Bank case and said a special investigation team would be probing the case.
Replying to clarification sought by the stock exchanges, debt-laden HDIL said its books of accounts are audited and reflect true and fair picture of the company’s business.
“The company has over a period of time availed of banking facilities from various banks and institutions including PMC Bank in the normal course of business,” HDIL Vice Chairman and MD Sarang Wadhawan said in a regulatory filing.
He further said that “adequate security cover in favour of the banks including PMC Bank has been created” over the assets of the company for these facilities in due compliance with all banking regulations as per guidelines described by the RBI.
Mr. Wadhawan said the company is facing temporary cash flow issues due to a slowdown in the real estate sector.
As a result, he said, the company has been admitted under the Insolvency and Bankruptcy Code (IBC), but added that it was “actively attempting to resolve” the issue.
The now-suspended managing director of the crisis-hit PMC, Joy Thomas, reportedly admitted to the RBI that the bank’s actual exposure to the bankrupt HDIL is over ₹6,500 crore— four times the regulatory cap or a whopping 73% of its entire assets of ₹8,880 crore.
As per initial investigations, the bank’s losses since 2008 were ₹4,355.46 crore, police said.
“In relation to borrowings from PMC, we have already issued letters requesting an appointment with the administrator in charge of the bank to put forth the true and correct picture as also to discuss a strategy hereby the interest of all stakeholders and in particular PMC Bank and its Depositors is protected,” Mr. Wadhawan said.
He said the company would take all necessary steps and extend full cooperation to any and all agencies/ authorities during this period.
“We would endeavour to put in place plans to address interest and aspirations of all the stakeholders and extend full cooperation with the regulators and authorities during this time,” he added.
He also said the company was not aware of any action against HDIL and its promoters.
“HDIL has been made aware of certain regulatory actions against PMC Bank and its management. It is also learnt that certain action is being initiated against HDIL and its promoters. We are unaware of any action against HDIL and its promoter,” Mr. Wadhawan said.