Fraudulent transaction of ~6K cr in DHFL unearthed

Grant Thornton’s report showed transactions of ‘undervalued, fraudulent & preferential’ nature

Dewan Housing Finance Corporation (DHFL) on Monday said its transaction auditor, Grant Thornton, had reported another fraudulent transaction of ~6,182 crore in the company. The administrator of the company received an initial report from the professional agency appointed as the transaction auditor indicating that there were certain transactions which were "undervalued, fraudulent and preferential in nature", DHFL said.

Dewan Housing Finance Corporation (DHFL) on Monday said that its transaction auditor, Grant Thornton, had reported another fraudulent transaction amounting to ~6,182 crore in the company.

The administrator of the company received an initial report from the professional agency, appointed the transaction auditor, indicating that there are certain transactions that are “undervalued, fraudulent and preferential in nature”, DHFL said in a regulatory filing.

“As per the transaction auditor report shared with the administrator, the monetary impact of the above transactions covered under the application amounts to ~5,381.90 crore towards outstanding principal, ~589.36 crore towards accrued interest and ~210.85 crore towards notional loss of interest, on account of charging lower rate of interest,” said the filing pertaining to the estimated impact on the company.

Further, the estimated amount involved in this fraud transaction places the monetary impact at around ~6,182.11 crore (that includes ~210.85 crore as notional loss of interest), said the company.

According to findings of Grant Thornton (GT), these transactions happened over a period of time.

The management of DHFL is currently being run under an administrator appointed under the Insolvency and Bankruptcy Code after frauds were detected in the company.

The administrator later on appointed GT the transaction auditor to conduct investigation of the affairs of the company.

Basis the investigation and observations of the Transaction Auditor, the administrator has filed an application before the Mumbai Bench of the National Company Law Tribunal (NCLT) on February 20, 2021, in respect of disbursement made to certain entities as other large project loans, against Kapil Wadhawan, Dheeraj Wadhawan, Creatoz Builders, Ikshudip Fincap, Rite Developers, and certain other entities.

DHFL said the application to that NCLT was filed against 33 respondents, including Kapil Wadhawan, Dheeraj Wadhawan, Creatoz Builders, Ikshudip Fincap, Rite Developers and certain other entities.

It is to be noted that further filings may be undertaken, in due course, the company said. The stock of DHFL was trading at ~18.05 apiece on the BSE, down 4.75 per cent from its previous close.