CBI Delivers DHFL Wadhawans in Biggest Loan Fraud Ever


In India’s biggest ever loan fraud case, the CBI has singled out former Dewan Housing Finance Corporation Ltd (DHFL) developers Kapil Wadhawan and Dheeraj Wadhawan as among 13 accused of defrauding a consortium of 17 banks of more than Rs 34,000 crore. So far the PNB loan fraud led by Nirav Modi (Rs 13,000 crore) and the ABG Shipyard loan fraud (Rs 20,000 crore) were seen as the most significant.

The agency, sources said, is conducting searches in 11 locations across the country at premises associated with the accused.

The CBI case was filed following a complaint by the Union Bank of India (UBI), which is the consortium’s lead bank. According to the UBI complaint, since 2010, the DHLL has provided credit facilities of over Rs 42,000 crore by the consortium of which Rs 34,615 crore remain unpaid. The loan was declared NPA in 2019 and fraud in 2020.

A forensic audit conducted by KPMG in 2020-2021 on the DHFL loan accounts observed that “significant amounts were disbursed in the form of loans and advances by the borrowing company to a number of entities and companies. inter-connected individuals having commonalities with the DHFL promoter entities, which were used for the purchase of stocks/bonds. »

According to the KPMG report, most of the transactions of these entities/individuals were of the nature of investments in land/property.

Besides Wadhwans, the CBI has booked Suhana Group’s Sudhakar Shetty and 10 other real estate companies.

The UBI alleged that KPMG’s audit indicates “significant financial irregularities, embezzlement of funds by related parties, fabrication of books to show non-existent fraudulent retail loans, round trips of funds and use of amounts misappropriated for asset creation by Sh. Kapil Wadhawan, Sh. Dheeraj Rajesh Kumar Wadhawan and their associates.

According to KPMG reports, as many as 66 entities, which were linked to DHFL and Wadhawans, advanced loans to the tune of almost Rs 30,000 crore flouting all standards.

Of these 65 entities, Kapil Wadhawan alone controlled approximately 40 entities by appointing administrators and auditors, managing income tax notices, maintaining secretarial records of these entities and managing overall financial control. of these companies, the CBI FIR alleged.

The DHFL defaulted on its debt payment obligations from May 2019. However, long before that, a number of NBFC companies faced problems in raising funds, following group companies defaulting on commitments. IL&FS. This was followed by a sharp correction in the DHFL share price. As banks raised questions about the company’s financial health, Wadhawans claimed the share price plunge was due to the sale of commercial paper by one of its investors and argued that the DHFL held strong liquidity equivalent to six months of cash. and would remain surplus even after taking into account all repayment obligations for the 2018-19 financial year. However, these turned out to be false assurances, according to the FIR.

The Wadhawans have faced multiple CBI and Enforcement Branch cases since the company collapsed in 2019 and were also arrested earlier in the Yes Bank case.


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