A special court here on Friday remanded Kapil Wadhawan, chairman and MD of Dewan Housing Finance (DHFL) who is accused of having dealings with dead gangster Iqbal Mirchi in the past, in judicial custody.
Wadhawan (46) was arrested on January 27 by the Enforcement Directorate under the Prevention of Money Laundering Act (PMLA).
He was produced before special PMLA judge P Rajvaidya at the end of his ED custody. The court sent him in judicial custody till February 18.
According to the ED, Wadhawan was instrumental in laundering of huge amounts of money as part of an illegal deal with Mirchi.
The agency claimed that in 2010, Wadhawan executed a deal with Mirchi to purchase the gangster's three properties in central Mumbai.
A sum of Rs 12,773 crore was siphoned off from DHFL on the pretext of providing loans to one lakh fictitious customers, the ED said.
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A part of this loan was used to make payments to Mirchi, who died in 2013 in London, it said.
Mirchi's Mumbai properties were sold to Sunblink Real Estate Pvt Ltd, a company linked to the Wadhawan brothers, Kapil and Dheeraj, the central agency said.
The agency has alleged Kapil Wadhawan "diverted" funds from DHFL to shell companies and later these dubious entities got amalgamated with Sunblink to "cover" alleged diversion of loans acquired from the housing finance firm.
Mirchi was allegedly the right hand man of gangster Dawood Ibrahim in latter's drug trafficking and extortion businesses.