New Delhi: The Central Bureau of Investigation (CBI) has registered fresh cases against the promoters of Dewan Housing Finance Corporation Ltd (DHFL).
This comes in the view of the case filed by the CBI against the erstwhile promoters Kapil Wadhawan and Dheeraj Wadhawan. They are accused of defrauding a consortium of banks which is led by the Union Bank o India. The fraud amounts to Rs 34,615 crore. This is the biggest banking fraud in India’s history.
CBI has already filed an FIR and the investigation is underway. CBI is performing search operations in almost 15 places within Mumbai involving DHFL.
As per the forensic reports submitted by the KPMG, the FIR reads that the Emails obtained by them show that these loans/ICDs were disbursed in favour of the promoter controlled/related/connected entities by DHFL as per the instructions given by the key promoters Kapil Wadhawan and Dheeraj Wadhawan.
History of DHFL and its financial irregularities
DHFL was established by Rajesh Kumar Wadhawan on April 11, 1984. The firm’s name was later changed to Dewan Housing Development Finance Limited and it later went on to become Dewan Housing Finance Corporation.
The firm in 2010, went on to acquire Deutsche Postbank Home Finance unit for an amount of Rs 1079 crores. Following this the firm further made an acquisition of 74% stake at DHFL Pharmecia Life Insurance Company Limited in 2013.
Fast forward to 2019, on January 29 an Indian investigative journalism agency, Cobrapost published an expose that rolled out details of DHFL siphoning over Rs 31,000 crores of public money using various shell companies. The key stakeholders of the firm were Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan.
The Cobrapost raised further allegations of political donations amounting to crores of rupees. These donations were in violation of Section 182 of Companies Act, 2013.
However, at that time DHFL filed a response with the Bombay Stock Exchange (BSE) refuting the allegations raised by Cobrapost. DHFL further said that this amount was subjected to its project loan portfolio.
The firm also clarified that the amount that they were subjected to by the Cobrapost should be Rs 21,000 crores and not Rs 31,000 crores.
The paramount drop in DHFL’s story came on June 6. 2019. Although the Indian credit rating agencies continued to issue high safety ratings issued for the financial products of DHFL.
But the DHFL later defaulted on its debt payment. This led to a downfall of debt rating for the firm. The price of the share went nosediving witnessing a 16 per cent downfall. At the time the firm was witnessing an all year low share-price. This led to a rapid decline in the investor’s confidence.
On November 20, 2019, the Reserve Bank of India (RBI) removed all the board of directors. They cited corporate governance failure and the firm’s default payment obligations.