Dewan Housing Finance Corporation Ltd. (DHFL) promoter Kapil Wadhawan had instructed his senior executive to pay high commissions to the company of builder Avinash Bhosale of Radius Group for negotiating project finance loans when his company was neither appointed by DHFL as an agent nor did it have any practice of paying commission to agents for such work.
This has been stated by Govindan Srinivasan, a former banker, who joined DHFL as a consultant after retirement and acted as an advisor to Wadhawan and forms part of the Central Bureau of Investigation’s (CBI) supplementary chargesheet in the Yes Bank - DHFL case. Bhosale is in judicial custody after arrest for his role in the case.
Srinivasan has clarified that in retail loans, nominal commissions were paid by DHFL to agents, who were appointed by DHFL for sourcing such retail loans. These commissions, he said, were only to the extent of around 0.5% in case of small retail loans. “However, in the case of commissions to the companies of Sh. Avinash Bhosale, these commissions were much higher, to the extent of up to 3% of the loans sanctioned,” he says in his statement and points out that the said companies of Bhosale were neither appointed by DHFL as agents for loan sourcing and nor there was any practice of payment of commission to agents or middlemen for project finance loans.
He says further that in his entire service at DHFL, he had seen only one other instance of this nature where DHFL had paid a commission of about Rs.17 crores to Jitu Navlani for a loan sanctioned by DHFL to M/s Bombay Dyeing. In that case, he said, there was an allegation that the said amount of Rs. 17 crores was paid to bribe government officers to evade enquiries.
Srinivasan said that since there is no express provision for payment of commissions in DHFL, he had asked Wadhawan how to show the commission in the company’s books. Wadhawan asked him to debit the amount from the expenditure accounts of DHFL, he has stated. These amounts might have been passed off as consultancy fee or project evaluation fee, he states.