The Securities and Exchange Board of India (Sebi) has barred Dewan Housing Finance Corp Ltd (DHFL) promoters from securities market over "fraudulent transactions" and releasing "false financial statements" for several years. These promoters have been restrained from buying, selling or dealing in securities, either directly or indirectly, Sebi said in its order.
The Sebi order has been issued against Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan, Sarang Wadhawan, Aruna Wadhawan, Malti Wadhawan, Anu S Wadhawan, Pooja D Wadhawan, Wadhawan Holding Pvt Ltd, Wadhawan Consolidated Holding Pvt Ltd, Wadhawan Retail Venture Pvt Ltd, and Wadhawan Global Capital Ltd.
The Sebi order said the violations are "very grave in nature" and the amount involved in the fraudulent transactions is of a very high magnitude. DHFL promoters engaged in fraudulent transactions worth Rs 14,046 crore from April 1, 2006, to March 31, 2019, said the order, adding that this amount is the closing balance outstanding in the books of the company as of June 30, 2019.
"...out of the Rs 23,815 crore shown as disbursed to Bandra Book entities in the accounts of the company, only Rs 11,755.79 crore was actually disbursed. This amount (Rs 11,755.79 crore), disbursed to 91 entities, but was shown in the books of the company as comprising of 2,60,315 home loan accounts," Sebi said in its September 22 order.
Sebi has also considered over Rs 3,348 crore as due towards "notional loss to the company " on account of fraudulently charging lower rate of interest to certain entities referred to in the application as the Bandra Book Entities.
The Sebi order is based on the report of transaction auditor Grant Thornton India Llp, which had earlier revealed that 34 entities of the total 91 that got loans invested some portions back in DHFL promoter firms without any collateral.
"By indulging in such fraudulent transactions, which were shown as bonafide transactions in the published financial statements and by issuing corporate announcements in the public domain, the promoters of the company have, prima-facie, defrauded the investors in securities of DHFL," said Sebi.
These entities and promoters have also been restrained from associating themselves with any listed public company and any public company as directors or promoters, which intends to raise money from the public or any intermediary registered with SEBI. They have also been asked to reply in 21 days as to why such an action should not be taken against these entities and persons, failing which the said action will be taken against them, Sebi said.