DHFL crisis: Govt orders SFIO probe into financial fraud charges against debt-laden mortgage lender, 5 other real estate firms

The Serious Fraud Investigation Office (SFIO) will investigate into the allegations of financial fraud against Dewan Housing Finance (DHFL) and five real estate companies, said a media report. On Monday, minister of state for corporate affairs Anurag Thakur informed the Lok Sabha that the government ordered an SFIO probe into the affairs of DHFL and five real estate companies namely Immediate Real Estate, Tenancity Real Estate, RKW Developers, Darshan Developers, and Rajen Skycraper, according to a report in Business Standard. The inspection report submitted by the regional director (western region) has not gone into the involvement of banks and officials, Thakur was quoted as saying in the report. [caption id=“attachment_6023581” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] “The investigation of DHFL and five others have been assigned to the SFIO on November 6 and the time for completion cannot be indicated as of now,”  he was quoted as saying in the report. The embattled housing finance company has a total loan portfolio of Rs 95,615 crore which includes housing loans of Rs 44,851 crore, non-housing at Rs 13,590 crore, SME loans Rs 4,924 crore under the retail loans. Early this month, the government had ordered an SFIO probe into alleged financial irregularities at DHFL after finding instances of suspected fund diversions. The debt-ridden DHFL came under the scanner in the wake of allegations that the company had siphoned off Rs 31,000 crore worth bank loans through layers of shell entities. The Ministry of Corporate Affairs carried out a detailed examination of the allegations of financial misdoings against the company’s promoters through the Registrar of Companies (RoC). On 22 November, the Reserve Bank of India (RBI) constituted a three-member panel to advise its administrator to help recover nearly Rs 84,000 crore that the troubled company owes to the system. The panel constitutes a veteran banker, the head of a leading insurer and also representation from a lobby grouping of asset managers. Last month, a forensic audit reportedly found massive fund diversion by the promoters and thus the lenders of DHFL  were averse to lend any additional money to the crippled company. The third-largest mortgage lender had sought a Rs 15,000-crore lifeline from the lenders as they finalise the resolution plan, which may also include picking up 51 percent equity in the company by converting their debt into equity. On 23 October, there were reports that RBI and market regulator Securities and Exchange Board of India (SEBI) might ask the views of audit firm TP Ostwal & Associates that reportedly gave clean chit to DHFL in March this year to know how it gave the clean chit to the debt-laden company. The clean chit was given soon after a news portal claimed that DHFL promoters had allegedly diverted funds to the tune of about Rs 20,000 crore from the company. — With inputs from agencies