Final forensic report to be soon with administrator

Mumbai | Published: January 24, 2020 8:17:59 AM

The Reserve Bank of India-appointed administrator had informed the CoC at a meeting on December 30, he was yet to "go through" the findings of the draft report.

Karvy, DHFL fraud case, Karvy fraud cases, Congress, Karvy Stock Broking, KSBL case, Karvy caseSome lenders had raised objections to approvals sought for related party transactions of DHFL with a few of its subsidiaries.

By Ankur Mishra & Shritama Bose

The final forensic audit report on Dewan Housing Finance Corporation (DHFL) by KPMG should soon be with the administrator R Subramaniakumar and subsequently the Committee of Creditors (CoC), bankers aware of the goings-on in the resolution process said. They explained that banks would not get the report directly and that the administrator would present it before the CoC.

The Reserve Bank of India-appointed administrator had informed the CoC at a meeting on December 30, he was yet to “go through” the findings of the draft report. The minutes of the meeting, reviewed by FE, quote the administrator saying, “…the report was the property of the lenders and not the Administrator…” The administrator also said the lenders could request KPMG to share such a report. Members had raised queries on the status of KPMG report on the special audit conducted during the ICA (Inter-Creditor Agreement) period.

Some lenders had raised objections to approvals sought for related party transactions of DHFL with a few of its subsidiaries. State Bank of India and Union Bank of India agreed with the administrator and said that prior permission would have to be taken from KPMG before sharing the report. One member stated that Serious Fraud Investigation Office (SFIO) has also taken cognisance of the said report.

The findings of a transaction audit of related party transactions, currently being done by Grant Thornton, would be discussed with the members of CoC as soon as the audit is completed. DHFL mentioned in its results filing on Thursday it had provisioned Rs 2,392 crore as a prudent measure on the uncertainty of recoverability by the way of unsecured inter corporate deposits (ICDs). The mortgage lender said that ICDs aggregating Rs 5,652 crore were outstanding as at March 31, 2019.

Of these, ICDs aggregating Rs 760 crore have been repaid by the borrowers and ICDs aggregating to Rs 1,306 crore have been converted into term loans as on September 30, 2019. KPMG’s draft audit report had earlier found that DHFL had disbursed loans to inter-connected entities with possible links to its promoters.

These loans amounted to Rs 12,541 crore. DHFL has also disbursed loans and advances totalling Rs 24,594 crore with inadequate loan documentation to 65 entities with minimal operations.

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