A fraud that is unmatched in India, hit by it 17 banks that were defrauded of Rs 34,000 cr allegedly by the promoters of Dewan Housing Finance Corporation Ltd (DHFL), Kapil Wadhawan and Dheeraj Wadhawan.
It exploded in 2019, when digital platform 'Cobrapost' claimed to have unearthed what it titled - 'India's biggest financial scam' perpetuated as per their expose by the then promoters of the company. Cobrapost claimed that the scam has primarily been pulled off through grants of loans and advances to shell companies and by using other means leaving a large consortium of banks led by Union Bank with bad debt of over Rs 31,000 cr.
A lot is at stake as this news breaks as DHFL is a listed NBFC in the business of lending money especially to promoters who are reportedly engaged in slum rehabilitation, housing development and other real estate business
Cobrapost then went on to give pages worth of investigative material supporting their claim of a massive loan fraud.
Lenders obviously panic and call for a special meeting and on February 1, 2019 appointed KPMG to conduct a "special review audit" of DHFL from April 1, 2015 to December 31, 2018. Reportedly, KPMG, in its audit, red-flagged diversion of funds in the garb of loans and advances to related and interconnected entities and individuals of DHFL and its directors.
Auditor Grant Thornton also in its 98-page report reportedy detailed the mode of operation of "round tripping" of funds through fake loans which focuses on 91 entities wherein the auditor found that no collateral or security was obtained before the grant of these loans. In total, 2.60 lakh "fake and fictitious" home loan accounts were created and over Rs 11,000 cr was 'disbursed'.
The promoters of erstwhile DHFL, Kapil and Dheeraj Wadhawan are currently in jail in connection with the cases registered by CBI and the Enforcement Directorate for the alleged fraud caused to Yes Bank n connivance with the bank's cofounder Rana Kapoor for allegedly involving kickbacks for investing in DHFL. Rana Kapoor is also lodged at Taloja jail on the outskirts of Mumbai.
To add to that agency has now unearthed a scam linked to the Pradhan Mantri Awas Yojana (PMAY). According to the CBI, Kapil and Dheeraj Wadhawan created "fake and fictitious" home loan accounts amounting to over Rs 14,000 crore and availed Rs 1,880 crore in interest subsidy from the Government of India.
The CBI has named DHFL, Kapil Wadhawan, Dheeraj Wadhawan along with 13 others and they have been booked on charges of cheating, fraud and under relevant sections of the Prevention of Corruption Act.