Ministry of Corporate Affairs to probe charges against DHFL

Ministry of Corporate Affairs to probe charges against DHFL

AgenciesUpdated: Wednesday, May 29, 2019, 02:58 AM IST
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New Delhi: The Ministry of Corporate Affairs (MCA) has taken a “very serious note” of allegations of financial mismanagement against Dewan Housing Finance Corp (DHFL), according to government sources. Investigative media outlet Cobrapost on Tuesday said Dewan diverted funds to shell companies to buy assets, and that firms linked to Dewan’s controlling shareholders – the Wadhawan group – made political donations beyond mandated levels. The company on Wednesday said the report was unfounded and malicious, and that it had engaged lawyers to defend itself. The government will likely inspect the records of Dewan Housing and “further action” against the company and its directors cannot be ruled out, said the source, who declined to be named due to the sensitivity of the matter.

Cobrapost alleged that the scam has been pulled off mainly by sanctioning and disbursing funds in secured and unsecured loans to dubious shell/pass-through companies, related to DHFL’s own primary stakeholders Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan through their proxies and associates, which have in turn passed the money on to companies controlled by the Wadhawans. “The money has been used to buy shares/equity and other private assets in India and abroad, including in countries like UK, Dubai, Sri Lanka and Mauritius,” creating offshore assets of around Rs 4,000 crore, Cobrapost said. The website also alleged that DHFL advanced monies to several companies in Gujarat and Karnataka around state elections, and also gave donations to the Bharatiya Janata Party (BJP). “… donations of Rs 19.5 crore have been given to the BJP between the financial years 2014–15 and 2016–17 by RKW Developers Pvt. Ltd., Skill Realtors Pvt. Ltd. and Darshan Developers Pvt. Ltd., respectively, although they were not entitled to do so. All these donors are linked to the Wadhawans,” Cobrapost said. The website added it has identified 45 companies which were used by Wadhwans as vehicles to siphon off funds from DHFL and were given loans in excess of Rs 14,282 crore.

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