Dewan Housing Diverted Rs 12,773 Crores By Creating One Lakh ‘Fictitious’ Customers: Reports Cite ED Sources

Dewan Housing Finance Corporation Limited (DHFL), reports say, diverted Rs 12,773 crores of company money towards a host of other companies reportedly connected with its promoters. DHFL, according to reports, managed this by accounting these diversions as loans to nearly one lakh fictitious customers.

The Enforcement Directorate (ED) this week arrested Kapil Wadhawan, the chairman cum managing director of Dewan Housing Finance Ltd (DHFL), in connection with the Iqbal Mirchi money laundering and illegal funding case.

The alleged diversion of funds in excess of Rs 12,000 crores was discovered when ED was probing accounts related to Rs 2,196 loan to five companies that were amalgamated with one Sunblink Real Estate Private Limited. Sunblink had come under the ED radar for purchasing reportedly owned by late Mumbai underworld criminal Iqbal Memo, better known as Iqbal Mirchi, properties Mumbai's Worli area.

“... these companies during the material time were never appearing as creditors in the books of accounts of DHFL group. Thus the malaise is running deep and a rough estimate gives such illegal diversion of funds to 79 such shadowy entities in garb of retail loan to approximately 1 lakh fictitious individual customers to be in excess of Rs 12773 crore in 2015, to provide a justifiable alibi to huge diversions,” the ED said while seeking extension of Kapil Wadhawan’s custody in a special court this week.

DHFL awaits proceedings at the National Company Law Tribunal under the aegis of Insolvency and Bankruptcy Code (IBC). A committee of creditors has already been formed and an interim administrator appointed.