Cobrapost expose: DHFL siphons off Rs 31,000 crore public money?

New Delhi, Jan 31: The investigative news portal Cobrapost has published a Rs 31,000 crore financial scam involving Dewan Housing Financial Limited (DHFL).

According to the Cobrapost story published on January 29, 2019, the primary promoters of a Non-Banking Financial Company (NBFC) called DHFL siphoned more than ₹31,000 crore of public money. The story alleges that the scam was mainly pulled off through grants of loans and advances to shell companies. The same money was then re-routed via these dubious companies and parked outside India so as to acquire assets.

Cobrapost reported that the scam was pulled off mainly by sanctioning and disbursing astronomical amounts in secured and unsecured loans to dubious shell/pass-through companies-all of which related to DHFL's primary stakeholders: Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan. The story alleges that the Wadhawans, through their proxies and associates, had, in turn, passed the money on to companies controlled by them. Cobrapost alleges that this money was used to buy shares/equity and other private assets in India and in other countries like the UK, Dubai, Sri Lanka and Mauritius.

According to the story, what helped Kapil and Dheeraj Wadhawan pull off the scam is the position of power and influence they've held since they occupied positions as majority members in the Finance Committee of DHFL-"which approves loans of ₹200 crore and above to any entity". The story alleges that the Wadhwans ensured "loans were granted to shell/pass-through entities and the money ultimately ended up in the companies owned or controlled by the Wadhawans".

In response to the serious allegation, DHFL said "Mischievous misadventure appears to have been done with a mala fide intent to cause damage to the goodwill and reputation of DHFL and resulting in erosion in shareholder value".

Shares of DHFL tanked 10 percent after news portal reported that as many as 32 Indian and foreign banks lent Rs 97,000 crore to DHFL group of companies with many borrower companies having the same addresses, directors and auditors.

"DHFL today received an email at 8.44 a.m. in the morning, with a follow-up reminder one hour later, seeking answers to 64 questions from CobraPost, many of which were laced with political innuendos. We are shocked and surprised to receive this inquiry this morning, although CobraPost had announced its press conference last Friday, i.e. 25 January 2019, to disclose an alleged financial scam," the company said in a press release on Tuesday.

Further the company slammed CobraPost for not asking questions during their investigations, "Their entire approach raises serious concerns about the motivation of this so-called expose. It is necessary in public interest that if they believed in the genuineness of their issues to have given DHFL an opportunity to explain the facts that are in any case available in the public domain."