The EOW’s closure of the case against Rakesh Wadhawan sparks controversy. Allegations of fraud, political ties, and a withdrawn ROC report raise serious questions.
Rakesh Wadhawan, a prominent figure associated with Housing Development and Infrastructure Limited (HDIL), has been at the center of several legal and financial controversies. This article delves into the recent developments surrounding the closure report filed by the Mumbai Police’s Economic Offences Wing (EOW) concerning allegations against Rakesh Wadhawan and his son, Sarang Wadhawan, as well as related issues involving Mack Star Marketing Pvt Ltd and office unit sales in the Kaledonia commercial tower.
EOW Closure Report
The Economic Offences Wing (EOW) of the Mumbai Police recently submitted a ‘C Summary’ report, effectively closing a case against HDIL promoters Rakesh and Sarang Wadhawan, along with others, regarding the alleged illegal sale of office units in the Kaledonia commercial tower. The EOW concluded that their investigation found no cognizable offense, classifying the matter as a civil dispute under the Companies Act. This decision has sparked considerable controversy and raised questions about the integrity of the investigation.
Background of the Case
The case originated from a complaint filed by Sumit Ranjan Saha, the Managing Director of Mack Star Marketing Pvt Ltd. The complaint alleged that the Wadhawans sold office units in the Kaledonia commercial tower without informing shareholders, resulting in losses of approximately Rs 100 crore. Investigations revealed that HDIL, facing financial difficulties, allegedly sold premium office spaces at discounted rates to various individuals, including politicians, businessmen, and creditors.
Involvement of Politicians and Others
The investigation brought to light that relatives of prominent Maharashtra politicians, including a former Chief Minister and a Union Minister, acquired office units at discounted rates. Additionally, a nephew of former gangster Jayendra Thakur also benefited from these discounted rates. These revelations have added a layer of political complexity to the case, raising concerns about potential influence and conflicts of interest.
Mack Star’s Complaint and Allegations
Mack Star, formed by HDIL promoters with investments from DE Shaw Group, played a central role in the Kaledonia project. HDIL allegedly misused office units between 2011 and 2019 to settle debts, including transferring units to relatives of former Union Minister Sushil Kumar Shinde at significantly below-market prices. The Enforcement Directorate (ED) also discovered that units were transferred to Viva Holdings, owned by the family of Bhai Thakur, without any payment to Mack Star.
DE Shaw officials discovered the unauthorized sales in 2017 and subsequently filed a police complaint in 2019. Based on this, an FIR was registered in February 2023, invoking sections of the Indian Penal Code (IPC) related to cheating and criminal breach of trust. The Central Bureau of Investigation (CBI) also registered an FIR against HDIL promoters in connection with the Yes Bank case, alleging defrauding Mack Star of Rs 200 crore. These parallel investigations underscore the complexity and severity of the allegations against Rakesh Wadhawan and HDIL.
Controversies Surrounding the EOW Investigation
During the EOW investigation, the Registrar of Companies (ROC) submitted a report alleging fraudulent shareholding increases by DE Shaw. However, this report was later withdrawn after Mack Star challenged its accuracy. Despite the withdrawal, the EOW’s closure report cited the ROC report, classifying the case as a corporate dispute. This decision has been heavily criticized, with allegations that the EOW was influenced by external factors. A senior EOW officer stated that they would address the issue if the complainant formally brought the withdrawal of the ROC report to their attention, indicating a willingness to reconsider the findings.
Sumit Ranjan Saha’s Response
Sumit Ranjan Saha, the Managing Director and complainant in the Mack Star Marketing Pvt Ltd fraud case, has written to the chief minister, DGP, ACS (home), CBI, and CVC, questioning the EOW’s decision to close the case against HDIL promoters. Saha’s letter raises serious questions about the integrity of EOW officers and alleges that the closure report was fabricated under duress to shield certain businesspersons and influential politicians.
The letter emphasizes that the closure report ignores conclusive findings of criminality reached by the ED and relies heavily on a false report from the Registrar of Companies, which has since been withdrawn. Saha’s communication calls for urgent intervention and the institution of appropriate departmental enquiries to address the alleged malpractices within the EOW.
Previous Legal Issues
Rakesh and Sarang Wadhawan were previously arrested in a multi-crore money laundering case involving Punjab and Maharashtra Co-operative (PMC) Bank. They were later granted bail after spending more than four years in custody. This prior legal entanglement adds context to the current allegations and underscores the ongoing scrutiny of the Wadhawans’ financial dealings.
Conclusion
The closure of the case against Rakesh Wadhawan and other HDIL promoters by the EOW has ignited a series of controversies and allegations. The complainant’s challenge to the EOW’s integrity, coupled with the involvement of politicians and the withdrawn ROC report, necessitates a thorough and impartial review of the matter. As the situation unfolds, it remains to be seen whether the authorities will address the concerns raised and ensure a fair and just resolution.
Sources: https://www.indiatoday.in/india/story/mumbai-police-closes-fraud-case-against-hdil-promoters-rakesh-wadhawan-son-2686155-2025-02-26
https://www.hindustantimes.com/cities/mumbai-news/complainant-writes-to-cbi-cvc-against-eow-s-closure-of-wadhawan-case-101740685752855.html
https://timesofindia.indiatimes.com/city/mumbai/complainant-questions-eow-move-to-close-fraud-case/articleshow/118609345.cms