A draft forensic report by KPMG had found the lender had disbursed loans and advances to inter-connected entities, which were likely linked to the promoters.
Apart from transaction audit being ordered to check fraud and ongoing investigations by investigative agencies, the current management of beleaguered mortgage financier Dewan Housing Finance Corporation (DHFL), under RBI-appointed administrator R Subramaniakumar, is separately reviewing allegedly fake customer account entries during the erstwhile management of the company, sources close to development told FE. The Reserve Bank of India (RBI) superseded DHFL board on November 20 and appointed Subramaniakumar as administrator. Multiple accounting entries were initially recorded in certain customer accounts for receipts for which the cheques had not been deposited in the banks and these have been subsequently reversed, the source added. Such instances have now been constantly reviewed by the current management and plans to introduce the confirmation from operation to that effect forward, source further said.
A draft forensic report by KPMG had found the lender had disbursed loans and advances to inter-connected entities, which were likely linked to the promoters. Moreover, loans and advances totalling Rs 24,594 crore had been disbursed with inadequate loan documentation to 65 entities that had minimal operations. FE reported earlier that DHFL had ordered three transaction audit reports by Grant Thornton to examine the alleged related-party and fraudulent transactions. The banks led by State Bank of India (SBI) had red-flagged the exposure to DHFL as fraud account.
DHFL posted a profit of Rs 934 crore in the third quarter, aided by switch to new tax regime and exemptions in provisions as it is under moratorium. DHFL is undergoing a resolution process under the Insolvency and Bankruptcy Code after the Mumbai bench of the National Company Law Tribunal (NCLT) admitted the case on December 2. The auditor mentioned mismatch of to the extent of `3,018 crore in the earnings which is yet to be identified and mapped to individual parties. The company is undergoing substantial financial stress since the second half of the previous fiscal. The company also mentioned that the ministry of corporate affairs had initiated a Serious Fraud Investigation Office (SFIO) investigation into the affairs of the company. Further, Enforcement Directorate (ED) had also initiated a probe in connection with the loans given by the company to certain borrowers. The company is fully co-operating with the investigating agencies, it added.