India’s biggest corruption scandal: Cobrapost accuses DHFL of Rs 31,000-cr scam

MUMBAI: Non-profit journalism company Cobrapost accused allegations against promoters of Dewan Housing Finance Corporation (DHFL) of having siphoned off Rs 31,000 crore public funds.

The DHFL’s primary promoters in the exposé are Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan.

Terming it India’s biggest financial scam, the report by Cobrapost alleged that around Rs 21,477 crore of DHFL’s funds was allegedly routed through a network of shell companies and parked outside India, to acquire assetswithout any declarations to the Ministry of Corporate Affairs.

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“The trail disappears into dozens of shell companies and that is where the fun begins. The shell companies and destination of the siphoned-off money are linked to or owned by the Wadhawans—promoters of DHFL,” the company said on Twitter.

The investigation made another big claimed that DHFL has made donations of around Rs 20 crore to the ruling Bharatiya Janata Party (BJP). The donation was made between the financial years 2014–15 and 2016–17 by Skill Realtors Pvt. Ltd., RKW Developers Pvt. Ltd., and Darshan Developers Pvt. Ltd., respectively. All these donors are linked to the Wadhawans, it adds.

Dewan Housing Finance DHFL was founded in 1984, to provide financial accessibility to lower and middle income customer segments among semi-urban and rural population in India.

As a investigative media report, the scrip of housing finance company closed over 8 per cent lower on Tuesday.

Accordingly, the company’s scrip at the BSE closed more than 8 per cent or Rs 14.80 lower to Rs 170.05 from its previous close of Rs 184.85.

On an intra-day basis, the scrip had slumped over 12 per cent to touch a low of Rs 164.50 per share.

As per analysts, this development will bring in more caution on the stock and valuations.

“Cobrapost has blamed the company for providing and moving funds via shell companies. This will further dampen the company valuations and might initiate investigations into the firm. Company already is facing funding issues. NBFC sector will be facing even more tighter liquidity if there is an investigation or a default by DHFL. We have a ‘sell’ rating on the company and would see a gap down opening tomorrow,” Sameer Kalra – Equity Research Analyst & Founder Target Investing, on DHFL said in a statement. this development will bring in more caution on the stock and valuations. “Cobrapost has blamed the company for providing and moving funds via shell companies. This will further dampen the company valuations and might initiate investigations into the firm. Company already is facing funding issues. NBFC sector will be facing even more tighter liquidity if there is an investigation or a default by DHFL. We have a ‘sell’ rating on the company and would see a gap down opening tomorrow,” Sameer Kalra – Equity Research Analyst & Founder Target Investing, on DHFL said in a statement.

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