Dewan Housing Finance Corporation: Second case of fraud against Wadhawans

By: |
September 29, 2020 6:30 AM

This is the second application filed by the administrator against the Wadhawans, with the first being in connection with fraud detected in transactions with certain related parties, often referred to as ‘Bandra book entities’.

The transactions in question occurred during the years FY17 to FY19, according to the audit report.

The administrator for Dewan Housing Finance Corporation (DHFL) has moved court against the company’s former promoters, Kapil and Dheeraj Wadhawan, and 38 others in connection with fraudulent transactions in the Slum Rehabilitation Authority (SRA) book.

This is the second application filed by the administrator against the Wadhawans, with the first being in connection with fraud detected in transactions with certain related parties, often referred to as ‘Bandra book entities’.

As per the transaction auditor’s report shared with the administrator, the monetary impact of the above transactions covered under the application amount to Rs 12,705.53 crore, (which includes principal of Rs 10,979.50 crore and accrued interest of Rs 1,726.03 crore), being the amount outstanding in the books of DHFL as on November 30, 2019.

The entire amount along with interest for the remaining period has been claimed through the application. The transactions in question occurred during the years FY17 to FY19, according to the audit report.

In a notification to the stock exchanges, DHFL said the administrator of the company received an initial report from Grant Thornton, which was appointed the transaction auditor, indicating that there are certain transactions which are fraudulent in nature, as per Section 66 of the Insolvency & Bankruptcy Code (IBC).

“Basis the investigation and observations of the Transaction Auditor, the Administrator has filed an application in respect of disbursements made towards development of two SRA projects, before the Mumbai bench of the National Company Law Tribunal (“NCLT”) under Section 60(5) and Section 66 of the Code on September 27,2020 against Kapil Wadhawan, Dheeraj Wadhawan, the developers and assignees of the SRA projects, and certain other entities (“Application”),” DHFL said.

Further filings may be undertaken in due course on the basis of the audit report, the notification said.

The application has been filed against 40 respondents, including Kapil Wadhawan, Dheeraj Wadhawan, Darshan Developers, Sigtia Constructions and certain other entities as reported by the transaction auditor.

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