Father-son duo arrested for HDFC loan default

A father-son duo, who are British nationals of Indian origin dealing in luxury cars and accused of defaulting on a Rs 270 crore loan acquired for using forged documents, were arrested while trying to fly out of the country, police said.

The arrests of Rashpal Singh Todd and his son Mandhir Singh Todd, who have dealership of Porshe and Audi cars in Haryana's Gurugram, came following investigations into a complaint filed by HDFC Bank last week and information that they were heading out of the country.

The Todds own Zenica Cars Pvt Ltd, which deals in Audi cars, and Zenica Performace Cars Pvt Ltd, which deals in Porshe cars. Sources said the banks provided a loan of around 270 crores in the past four years and there is still an outstanding of around Rs 120 crore. The accused could not be contacted for their version of the story.

The bank approached Delhi Police's Economic Offences Wing (EOW) soon after it came to light that the duo and their companies allegedly submitted fake documents to avail credit facilities for purchasing new cars, demo cars, used cars and spare parts. It came to know about the irregularities during the physical comprehensive stock audit and verification of the various documents.

"Most of the documents provided are forged which has induced us to extend huge credit facilities to the accused...we have been cheated by the accused persons and they have taken advantage of the trust reposed by us," according to the HDFC Bank's Assistant Vice President Sanjay Sharma said in the complaint, cited in the FIR.

According to the FIR, the companies submitted fabricated balance sheets and other financial documents, which showed that they were having profits in the past four years, while it was the opposite. The bank told the police that they were showing profits but at the same time was telling them they were unable to pay the dues.

The firms also informed HDFC a lower amount of loan it took from J&K Bank -- while it took a loan of Rs 49.51 crore, it told the HDFC it took only Rs 11.64 crore. It is said that the Todds claimed to have stocks in hand when actually they did not have any.

In another instance of irregularities, the Todds allegedly was to have a stock of 200 cars as per the books but they got only 29 cars were there. "The rest of the cars were clandestinely sold by the accused without informing the Bank," the FIR quoted from the complaint.

On demo cars, which are used for test drives bought at lower prices and later sold at a discounted price, the FIR said the bank gave credit facilities to buy 32 such cars and the accused re-sold it to customers without informing the bank. Same was with the sale of used cars, it added.