Updated: October 5, 2020 7:05:11 am
Many borrowers used common addresses and the Bandra Books entities charged a lower interest rate, all of which contributed to the insolvency crisis at DHFL. (File photo)
Hundreds of fictitious loan accounts, deposits routed through an imaginary entity in Bandra, and a demand for recoveries totaling Rs 14,046 crore – these are some of the key findings in the final forensic report presented by auditor Grant Thornton in the Dewan Housing Finance Corporation Limited (DHFL) scam.
Sent to the RBI-appointed administrator on August 27, the report comes as DHFL owners Kapil Wadhawan and his brother Dheeraj Wadhawan are out on bail after being arrested by investigative agencies in January this year.
The 98-page report follows the preliminary report presented by Grant Thornton to the RBI’s designated administrator, R Subramaniakumar, in February and carries out the modus operandi of “round-trip” of funds through bogus loans.
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Referring to the case as Bandra Books, the report highlights how the names of the fake home loan “borrowers” were collected: the details were “randomly selected from a database that appears to have been created from loan account details. closed “.
In total, 2,60,315 “bogus and fictitious” mortgage loan accounts were created at the non-existent Bandra branch between 2007-2019 and 11,755.79 million rupees were deposited with Bandra Book entities.
Up to 91 entities are the focus of the auditor’s final forensic report, in which it was found that no collateral or collateral was obtained prior to the granting of these loans.
The finances of 50 of them, who received 70% of Bandra Book’s total disbursements, have been examined to expose the link between the DHFL promoters and these borrowers.
The conclusion: “It was observed that 34 entities have invested a part of the amount received from the Corporate Debtor (the Wadhawans) in companies, which are related parties or directly or indirectly linked to the promoters …”
Read also | DHFL’s Wadhawan brothers gifted four properties in Dubai to Iqbal Mirchi’s son
The amount of bogus loans disbursed to what the auditor has described as “potentially directly / indirectly” linked to the promoters is Rs 1,554.51 crore.
In several cases, according to the report, the funds disbursed were diverted to entities that had ties to the promoters.
Many borrowers used common addresses and the Bandra Books entities charged a lower interest rate, all of which contributed to the insolvency crisis at DHFL.
The links to the Bandra Book entities are clear in several cases. For example, the Wadhawan brothers or their families were found to be directors or promoters of several of these companies.
In his own report, the RBI-appointed Administrator noted that the funds disbursed by the Corporate Debtor (Wadhawans) to the Bandra Book Entities were “diverted to entities that have a connection with Promoters / Directors.”
Read also | Bombay HC gives default bond to DHFL Dheeraj promoters, Kapil Wadhawan
And that the Bandra Book entities were used as “conduit to carry out these fraudulent activities … these persons are henchmen of the promoters / Directors and have acted as accomplices of the fraud commission in connection with the Bandra Book disbursements …”.
Along with the Wadhawan brothers, the owners of the Bandra Book entities have also been declared defendants in ongoing proceedings in the National Society Law Court with recoveries totaling Rs 14,046 million to be brought against all of them.
Last week, The Indian Express reported that a Dubai-based real estate development company owned by the Wadhawans had gifted four properties to the late gangster Iqbal Mirchi’s son Asif Iqbal Memon in 2015, according to an Enforcement Directorate investigation ( ED).
DHFL, which owes Rs 83,873 crore to banks, mutual funds and investors, became the first non-bank finance company (NBFC) to be referred to bankruptcy court for resolution by RBI in November 2019.
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