DHFL scam: UP police arrests fake brokerage owners
The economic offences wing (EOW) of Uttar Pradesh Police has arrested seven accused in the UP Power Corporation (UPPCL) employees’ provident fund (PF) scam, in which ~4,122 crore was illegally parked with private lender Dewan Housing Finance Corporation (DHFL).
Those arrested include a senior DHFL official, a chartered accountant (CA), and owners of bogus brokerage firms.
With the new arrests, the number of those taken into custody in the case has risen to 12.
While ~4,122 crore was invested in DHFL as unsecured term deposits by the two trusts managing the PF of power employees between March 2017 and December 2018, about ~2,267 crore is yet to be repaid by the company, which has been barred by the Bombay High Court from making fresh repayments.
The arrested persons are Amit Prakash, Manoj Kumar Agarwal, Vikas Chawla, Sanjay Kumar, Shyam Agarwal, Arun Jain, and Pankaj Giri (alias Nishu).
According to the state government, Prakash had served as the regional sales manager of DHFL in Lucknow, and was responsible for empanelling firms and individuals as brokers/brokerage firms.
He has been accused of criminal complicity, with suspended UPPCL official P K Gupta and his son Abhinav, for facilitating high value brokerages.
Manoj Kumar Agarwal, Chawla, Sanjay Kumar, Jain, and Giri had either floated bogus brokerage firms or acted as conduits for taking hefty commissions from DHFL for the term deposits made by the UPPCL trusts. Shyam Agarwal, a CA , allegedly facilitated payment of brokerages to seven different firms/individuals.
Last month, the state government had said it would ensure payment of the outstanding investment with DHFL , i n case the tainted non-banking financial company (NBFC) failed to fulfill its commitment.
According to t he UP Government Order (GO), the state would first harness legal avenues to secure the PF i nvestment i n DHFL, failing which the UPPCL would be asked to arrange funds out of its own resources to repatriate the corpus.
In case t he power utility also failed to mobilise funds, the state government would offer interest-free loans to UPPCL to make up for the purported loss.
At the same time, the state has started the process of disinvesting the PF corpus in two other NBFCS — LIC Housing Finance and PNB Housing Finance — which would later be invested in other public sector financial institutions according to norms.
The 45,000-odd employees of UPPCL had long been demanding the state government to issue a gazette notification undertaking to ensure repayment.
DHFL is currently being probed by the enforcement directorate (ED) for money laundering . While ~4,122 crore was invested in DHFL alone, PF investments were also parked in LIC Housing and PNB Housing, with investments in the three NBFCS amounting to ~6,600 crore.
Those arrested included a senior DHFL official, a CA and the owners of a bogus brokerage. With these arrests, the number of those taken into custody has risen to 12