Latest revision as of 18:04, 1 February 2019

[edit] Irregularities, alleged

[edit] 2019, Jan

₹31,000 crore scam by DHFL, alleges portal, January 30, 2019: The Times of India

Investigative portal Cobrapost alleged a Rs 31,000-crore scam by the promoters of non-banking finance company Dewan Housing Finance Ltd (DHFL), using bank loans, which it claimed were routed through “shell companies” and passed on to the promoters. This money was then used to acquire assets overseas, including property, shares and a cricket team in Sri Lanka, with the value estimated at around Rs 4,000 crore, it claimed.

At a press conference to reveal the country’s “biggest financial scam”, Cobrapost claimed its investigations had shown that group companies linked to the Wadhawans, promoters of DHFL, made donations of Rs 19.5 crore to BJP, violating the law. It claimed that donations by RKW Developers, Skill Realtors and Darshan Developers between 2014-15 and 2016-17 flouted provisions of Section 182 of the Companies Act, 2013, which governs corporate funding of political parties.

Profit-making companies can donate up to 7.5% of net profits for the previous three years but the companies were either loss-making or the profits were lower than the contribution. BJP did not comment.

WITHOUT ANY SECURITY

DHFL disbursed ‘huge loans’ to shell companies, alleges portal

With former finance minister Yashwant Sinha and activist lawyer Prashan Bhushan in attendance, a press conference by news portal Cobrapost took a political tinge as it accused auditors and government agencies of not being vigilant.

The DHFL group was in the spotlight after the collapse of IL&FS as it was finding it tough to raise money and had a huge exposure of banks and mutual funds. Cobrapost estimated DHFL’s debt exposure at close to Rs 97,000 crore with banks lending around Rs 50,000 crore. SBI alone is estimated to have an exposure of Rs 11,500 crore.

Cobrapost accused DHFL of disbursing “huge loans” to shell companies, mostly without any security. Loans were also given against slum development projects without any due diligence with disbursements taking place in one shot instead of releasing money in tranches, it claimed.

Alleging violation of various laws, Cobrapost said there were charges of insider trading of around Rs 1,000 crore against the group.

The portal said its investigation identified 45 companies which were allegedly used by the Wadhawans to divert funds. These “shell companies” received loans of Rs 14,282 crore. Within this, 34 companies received close to Rs 10,500 crore unsecured loans of which 11 companies belonged to Sahana Group which received loans of around Rs 3,800 crore.

“Of these, 34 companies are so dubious that most of them have no business or income. More often than not, they are audited by the same accounting agencies, helping them hide all fraudulent transactions. Many of these companies operate from the same addresses and are run by the same group of initial directors. A large number of them are newly incorporated with nominal capital of around Rs 1 lakh. Yet, these companies were extended unsecured loans, in single tranches, without any security or collateral. Many of these companies also share the same email addresses,” it said.

Cobrapost said 35 companies did not file documents creating a charge or a security on the loans and several had not filed their balance sheets for 2017-18. “DHFL has also hidden the terms of loan and terms of repayment in its financial statement. Importantly, all the shell companies have zero or very negligible income from their business operations since their inception,” it added.

The portal said one of the directors on some of the Sahana Group companies, Jitendra Jain, under investigation by the Economic Offences Wing, was in judicial custody. A prominent shareholder of the Sahana Group is former Shiv Sena MLA Dalvi Shivram Gopal. It alleged that most of the loans extended to Sahana had turned into non-performing assets, where repayments have been due for at least 90 days at a stretch.

Cobrapost also alluded to political links, pointing out that loans of Rs 1,160 crore were sanctioned to various Gujaratbased companies for several projects, which have now been put on hold. These loans were given “very close to the time of the Gujarat elections”. Similarly, Karnataka-based companies received loans of Rs 1,320 crore before assembly elections in the state.

“The investigation has found three companies, Galaxy, Silicon and Hemisphere, linked to Wadhawans, which have been instrumental in the scam,” the portal said.