MCA Orders SFIO Investigation of DHFL, 5 Other Companies
Moneylife Digital Team 27 November 2019
The ministry of corporate affairs (MCA) has ordered an investigation by serious fraud investigation office (SFIO) into affairs of Dewan Housing Finance Corp Ltd (DHFL) and five other companies, says Anurag Singh Thakur, minister of state for finance and corporate affairs.
 
In his written reply in the Lok Sabha, the minister says, "The Ministry has ordered investigation of DHFL and five other companies, Immediate Real Estate Pvt Ltd, Tenancity Real Estate Pvt Ltd, RKW Developers Pvt Ltd, Darshan Developers Pvt Ltd and Rajen Skycrapers Pvt Ltd to be conducted by SFIO vide order dated 6 November 2019...the time for completion cannot be indicated as of now."
 
Members of Parliament (MPs) Asaduddin Owaisi and Imtiaz Jaleel Syed had asked the question about DHFL, borrowings of the company and involvement of bank officials. 
 
Quoting from a report submitted by the regional director (western region) under the  registrar of companies (RoC), the minister, stated as on 31 March 2019, DFHL had taken loans worth Rs95,615 crore. 
 
 
However, the inspection report submitted by the regional director of RoC has not gone into the involvement of banks and officials, Mr Thakur clarified.
 
Last month, the RoC regional office in Mumbai has recommended action by the SFIO against DHFL in its report submitted to the MCA. There is enough concrete evidence of financial irregularities by DHFL, while the report points to fund diversion and siphoning. 
 
As of 6 July 2019, DHFL had a total debt of about Rs1 lakh crore in which banks have an exposure of Rs38,342 crore.
 
In August, the DHFL board approved a proposal to convert its debt into equity, which will give banks control of the mortgage lender that has been struggling to meet its payment obligations.
 
Last week on Wednesday, the Reserve Bank of India (RBI) superseded the board and there were reports that they want to refer DHFL to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). An administrator has been appointed to take stock of assets and liabilities. A resolution plan will be accepted only if 66% of the CoC (Committee of Creditors) approve it. There has been a freeze on payment to creditors already.
 
Last Friday, the central bank appointed a three-member advisory committee to assist the administrator of DHFL. The members on the advisory panel are Dr Rajiv Lall, non-executive chairman of IDFC First Bank Ltd, NS Kannan, managing director and chief executive (CEO) of ICICI Prudential Life Insurance Co Ltd and NS Venkatesh, CEO of Association of Mutual Funds in India (AMFI).
 
DHFL has been facing a liquidity crisis since September 2018 and has so far paid Rs 41,000 crore of its financial obligations through a securitisation of assets and repayment collections.
 
DHFL had stopped paying all creditors after the Bombay High Court order on 10th October put a stay on payments. The company had earlier stopped accepting public deposits and renewals of existing deposits and pre-mature withdrawals of existing deposits on 21st May.
Comments
Badal Kumar De
5 years ago
Someone please suggest me how and when can I liquidate my FD from DHFL.
Asokkumar Rathnam
5 years ago
I am surprised that the Digital Team which has authored this Article is confused between the loan portfolio of DHFL i.e. the loans extended by the Company and the borrowings of the Company to fund their assets in its write-up.
MDT
Replied to Asokkumar Rathnam comment 5 years ago
Thanks for your comment. This report is based on a reply given by the minister in the Lok Sabha. Before the table, the minister had stated, " As per inspection report, the company has taken the following loans as on 31.03.2019."
You can check it for yourself. Here is the link to the LSQ http://164.100.24.220/loksabhaquestions/annex/172/AU1375.pdf
Prachi Mishra
Replied to Asokkumar Rathnam comment 5 years ago
Am not sure what needs to be done to get my FD liquidate. Could someone please help me with the same.
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