DHFL Accused Of ₹31,000-crore Fraud

Website Cobrapost on Tuesday claimed that its team of investigative journalists had unearthed “the biggest banking scam” in the country’s history.

At a press conference here on Tuesday, it accused the primary promoters of Dewan Housing Finance Limited (DHFL) of siphoning off more than ₹31,000 crore of public money through secured and unsecured loans and advances to shell companies, round tripping, tax avoidance and insider trading.

“Money has also been routed through these dubious companies and parked outside India, to acquire assets,” the website said in a press release.

DHFL rejected the allegations as “mischievous misadventure” done with mala fide intent and said it had met all its obligations to the lenders and paid them back over ₹17,000 crore in the last three months.

DHFL’s primary stakeholders, Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan, used their proxies and associates to buy shares/equity and other private assets in India and abroad, the website alleged. “By lending to shell/pass-through companies without due diligence, DHFL has ensured that the recovery of such dubious loans is impossible since the companies or their directors themselves do not own any assets.

“This way the private assets acquired by the Wadhawans and their associates by using the funds from these dubious loans are completely ring-fenced from any recovery process that may be initiated by authorities under the SARFAESI Act or IBC. Thus, the only losers in the process would be the public sector banks, such as SBI and Bank of Baroda, with an exposure of over ₹11,000 crore and ₹4,000 crore, respectively, foreign banks and shareholders from among the public or investors of DHFL,” said Cobrapost editor Aniruddha Bahal at the press conference here.

The website also said that donations of ₹19.5 crore had been given to the BJP between 2014–15 and 2016–17 by RKW Developers Pvt Ltd, Skill Realtors Pvt Ltd and Darshan Developers Pvt Ltd — donors linked to the Wadhawans. “These charities, however, flout the provisions of Section 182 of the Companies Act, 2013, which govern corporate funding to political parties,” the statement said.

Further, the website said the Wadhawans ensured loans were granted to shell/pass-through entities and the money ultimately ended up in the companies owned or controlled by them.

“Understandably, there have been serious violations of several civil and criminal laws and regulations. There is a massive deviation both from the industry practice on the lending policy of the company and from the good corporate governance norms of the company,” the statement added.

However, the DHFL statement insisted all loans are disbursed by the company in compliance with regulatory norms. The company’s financial statements are submitted to the stock exchanges and are in the public domain, it added.

“DHFL and its group companies are confident of meeting any scrutiny on any aspect of our operations and will pursue these frivolous allegations to its logical conclusion,” it said.

It said the news website contacted the company only on Tuesday morning, despite announcing its press conference last Friday, seeking answers to 64 questions “laced with political innuendos”.