DHFL CEO Harshil Mehta quits, to remain executive president; shares tank initially but later firms up by 6.42%

Dewan Housing Finance Corp Ltd, which was hit by claims of financial mismanagement last month, said on Wednesday its Chief Executive Harshil Mehta has resigned.

In early morning trade, the stock was down nearly 6 percent at Rs 104, down Rs 6.55. Later, it recouped and was trading higher by 6.33 percent at Rs 117.55, up by Rs 13.55 from day's low.

On Wednesday, DHFL said Mehta has decided to resign from his position with immediate effect. "However, he would continue to be associated with the company and shall hold the designation of Executive President-Retail Business with effect from 14 February 2019," DHFL said in a regulatory filing on stock exchanges.

Besides, the board has recommended appointment of Sunjoy Joshi as an Independent Director and Srinath Sridharan as a Non-Executive Director.

Representational image. Reuters.

Representational image. Reuters.

Recently, Cobrapost alleged that Dewan Housing Finance Corporation Ltd (DHFL) through layers of shell companies allegedly siphoned off Rs 31,000 crore out of the total bank loans of Rs 97,000 crore.

The expose alleged that the scam has been pulled off mainly by sanctioning and disbursing astronomical amounts in secured and unsecured loans to dubious shell or pass-through companies related to DHFL's primary stakeholders Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan.

It alleged that this was done through their proxies and associates, which have in turn passed the money on to the companies controlled by the Wadhawans.

The company's stock has lost over 80 percent of its value since broader concerns over the operations of the country's shadow banking sector emerged in September.

--With input from agencies

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Updated Date: Feb 14, 2019 12:17:56 IST

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