CBI Arrests DHFL Promoter In India's Biggest Bank Fraud Worth Rs 35,000 Cr

Dewan Housing Finance Ltd (DHFL) promoter Dheeraj Wadhawan was arrested by the Central Bureau of Investigation (CBI) related to the Rs 35,000 crore fraud with a consortium of 17 banks including the Union Bank of India, according to a Hindustan Times report.

Dheeraj Wadhawan along with his brother Kapil, who was already in prison, have been accused of diverting funds from banks to entities under their control by sanctioning loans to these entities without due diligence, without obtaining adequate securities, and through falsification of account books.

A senior official was quoted by HT as saying, "Dheeraj Wadhawan was arrested on Monday from Mumbai and was produced in a Delhi court on Tuesday." He has been remanded to judicial custody till May 30.

The CBI had arrested the Wadhawan brothers on July 19, 2022, however, they were granted statutory bail on December 3 that year by a trial court observing that the probing body's charge sheet filed against them and 73 other accused on October 15, 2022 was incomplete. The decision was upheld by the Delhi High Court in May 2023.

The Supreme Court ordered the immediate arrest of the brothers setting aside the order of the Delhi HC in January this year as the CBI filed its charge sheet in the case within the 90-day statutory period.

Dheeraj Wadhawan's legal team said in the court on Tuesday that the accused should be granted interim bail for 12 weeks till his final bail plea is disposed. However, senior advocate Amit Desai representing Wadhawan did not comment on HT's request.

A report on May 1 by HT stated that the CBI filed a charge sheet in the case last month naming Alok Kumar Misra, former chairman and managing director of Bank of India and Oriental Bank of Commerce, and 33 others.

CBI has claimed that Misra got Rs 1.5 crore from DHFL in the form of a discounted flat for his son in Mumbai to sanction loans in his capacity as the head of BOI and OBC which was merged with Punjab National Bank in 2020. Misra was the head of BOI from 2009 to 2012 and OBC from 2007 to 2009.

Between January 2010 and December 2019 17 banks extended credit worth Rs 42,871 crore to DHFL. The Wadhawan brothers siphoned off the funds to shell companies known as 'Bandra Book Entities' causing losses of Rs 34,936 crore to the consortium of banks.

According to CBI officials, this is India's biggest ever bank fraud case after ABG Shipyard Ltd case, which was handed to the agency in February 2022. ABG and its chairman Rishi Kumar Aggarwal have been accused of cheating a consortium of 28 banks led by ICICI Bank to the tune of Rs 22,842 crore.

Since its takeover and subsequent selling under India's bankruptcy code, the ownership at DHFL has changed.

The federal agency found during its investigation that 49 out of 131 companies originally named in the FIR filed in June 2022 were "genuine" borrowers without any bad intentions on their part.

Genuine loan transactions worth Rs 13,425 crore in this case has been identified by the agency of which Rs 5,836 crore has already been repaid by the companies to either DHFL or Resolution Professional. The court last month exonerated these companies from any criminal liability based on the findings of the CBI.

The probe by the CBI has revealed that DHFL had given loans amounting to around Rs 11,765 crore to 87 shell companies approximately of which 81 belonged to companies of the Wadhawan Group.

These companies were not shown in the company's account books and the amount was instead marked as loan given to 2,60,315 fictious individuals without any documentation, security or even loan applications.

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