Father-son luxury car dealers held for 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 using forged documents, were arrested while trying to fly out of the country, police said.

The arrests of Rashpal Singh Todd and son Mandhir Singh Todd, who have the dealership of Porshe and Audi cars in Haryana's Gurugram, came after investigations into a complaint filed by the 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 Porsche cars. Sources said the banks provided a loan of around Rs 270 crore in the past four years and there is still an outstanding amount of around Rs 120 crore.

The accused could not be contacted for their version of the story.

The bank approached the 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. The irregularities were found during the physical comprehensive stock audit and verification of 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," 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, whereas it was the opposite. The bank told the police that they were claiming profits, but at the same time telling them they were unable to pay dues.

The firms also told HDFC that they had taken a loan of Rs 11.64 crore from J&K Bank, whereas it was a much higher amount of Rs 49.51 crore. It is said that the Todds claimed to have stocks in hand when actually they didn't have any.

In another instance of irregularities, the Todds allegedly had a stock of 200 cars as per books, but had only 29 in reality. "The rest of the cars were clandestinely sold by the accused without informing the bank," the FIR said.

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