by THO
The Central Bureau of Investigation (CBI) has arrested Dheeraj Wadhawan, promoter of Dewan Housing Finance Ltd (DHFL), in connection with the ₹35,000 crore fraud with a consortium of 17 banks led by Union Bank of India, people familiar with the development said.
Dheeraj, along with his brother Kapil Wadhawan, who is already lodged in prison, are accused of diverting funds obtained from banks to entities controlled by them by way of sanctioning loans to these entities without due diligence, without obtaining adequate securities, through falsification of books of accounts.
A senior officer familiar with the development said – “Dheeraj Wadhawan was arrested on Monday from Mumbai and was produced in a Delhi court on Tuesday”. The court has sent him to judicial custody till May 30.
The Wadhawan brothers were arrested by CBI on July 19, 2022, but on December 3 same year, a trial court granted them statutory bail saying the charge sheet filed by agency against them and 73 other accused persons on October 15, 2022, was incomplete. The Delhi high court upheld the trial court’s decision in May 2023.
In January this year, the Supreme Court ordered immediate arrest of the brothers setting aside the Delhi high court order as the CBI had filed its charge sheet in the case within a 90-day statutory period.
Dheeraj Wadhawan’s legal team argued in court on Tuesday that the accused should be released on interim bail for 12 weeks till his final bail plea is disposed. When contacted, senior advocate Amit Desai, who represents Dheeraj Wadhawan, didn’t comment on the arrest.
As reported by HT on May 1, the federal anti-corruption agency last month filed a charge sheet in the case naming Alok Kumar Misra, former chairman and managing director (CMD) of Bank of India and Oriental Bank of Commerce, along with 33 other individuals.
The agency has claimed that Misra benefited to the tune of ₹1.5 crore from DHFL in the form of a discounted flat for his son in Mumbai for sanctioning loans in his capacity as head of BOI and OBC (merged with Punjab National Bank in 2020). Misra headed BOI from 2009 to 2012 and OBC from 2007 to 2009.
In the DHFL fraud, it is alleged that between January 2010 and December 2019, a consortium of 17 banks extended credit facilities worth ₹42,871 crore to DHFL. The Wadhawans siphoned off the funds to shell companies/paper entities, known as ‘Bandra Book Entities’, and caused a loss of ₹34,926 crore to the consortium.
Officials in CBI said DHFL is India’s biggest ever bank fraud case after ABG Shipyard Ltd case, which was taken up by the agency in February 2022. ABG and its chairman Rishi Kumar Aggarwal are accused of cheating a consortium of 28 banks led by ICICI Bank of ₹22,842 crore.
DHFL’s ownership has since changed after it was taken over and sold under India’s bankruptcy code.
In its investigation, the federal agency has found that 49 of 131 companies originally named in the first information report (FIR), filed in June 2022, were “genuine” borrowers without any bad intentions on their part.
It has identified genuine loan transactions worth ₹13,425 crore in the case, out of which ₹5,836 crore has already been repaid by these 49 companies either to DHFL or Resolution Professional. Based on CBI’s findings, the court last month exonerated these companies from any criminal liability.
CBI probe has revealed that DHFL had given loans of about ₹11,765 crores to approximate 87 shell companies, out of which 81 belonged to companies of Wadhawan Group. These companies were not recorded in the company’s books of accounts and instead the amount was shown as loan given to 2,60,315 fictitious persons without any documentation, security or even loan applications.
