Deloitte resigns as auditor to Dewan Housing Finance Corporation

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Updated: Aug 06, 2019 1:03 PM

India's debt-laden shadow bank Dewan Housing Finance Corporation Ltd (DHFL) on Tuesday said one of its auditors Deloitte, Haskins & Sells LLP had resigned.

In a letter to DHFL, Deloitte said it resigned in view of the matters stated in the shadow bank's financial statements for the year ended March 31, DHFL said in a statement.In a letter to DHFL, Deloitte said it resigned in view of the matters stated in the shadow bank’s financial statements for the year ended March 31, DHFL said in a statement.

India’s debt-laden shadow bank Dewan Housing Finance Corporation Ltd (DHFL) on Tuesday said its creditors would not have to take any haircuts on principal payments under its resolution plan, sending shares up as much as 10%.

As part of the resolution plan, DHFL will also put a moratorium on repayments and seek funding from banks to start retail lending, the company said after a meeting of the special committee for resolution plan.

DHFL, the fourth-biggest housing finance company in India, has roughly 1 trillion rupees ($14.15 billion) of debt and is in the process of seeking lender approval on a restructuring designed to help it ride out a liquidity crunch and restart its lending business.

The shadow bank also said in a separate statement its auditor Deloitte, Haskins & Sells LLP had resigned, citing irregularities in DHFL’s financial statements for the year ending March 31.

Last month, DHFL filed its long-delayed audited results for the quarter ended March 31, and revealed that its auditors had raised several red flags around its numbers.

The resignation of auditors comes at a time when the country is staring at a severe cash crunch in the non-banking financial space after a default by Infrastructure Leasing and Financial Services Ltd last September spooked investors and triggered a massive sell-off.

As of 0725 GMT, DHFL shares were trading 7.4% higher at 45.05 rupees on Tuesday. They have fallen 83% this year, as of the previous close.

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