Subramanian Swamy Accuses Indiabulls of 1 Lakh Crore Fraud; Indiabulls Denies
Subramanian Swamy, leader of the Bharatiya Janata Party (BJP), has publicly released a letter he had sent a month ago (28 June 2019) to the prime minister (PM) Narendra Modi which accuses the Indiabulls group of embezzling Rs1 lakh crore from the National Housing Bank (NHB). 
 
In the letter Mr Swamy stated that, “As per credible information that I have, and after perusal of many available documents, I wish to inform you that India Bulls Housing Finance Limited and its associates which many Congress leaders e.g., P Chidambaram and BS Hooda have patronised, is heading now for a financial collapse and bankruptcy, resulting large corruption issues in real estate sector, banking, stock markets and loss of more than Rs. One lakh crores of funds of public and of National Housing Bank.”
 
“India Bulls Housing Finance Limited and its related firms formed more than 100s of shell real estate firms to take loans from NHB and re-allot or siphon it off to many real estate firms in Maharashtra, Delhi, Gurugram, Bangalore and Chennai in the range of Rs.30 crores to Rs.1000 crores. After allotting these loans to other friendly real estate firms India Bulls accepted these amounts back as an investment to them! Some of such dubious loans were just book entries. That is, nothing but money laundering and round-tripping,” Mr Swamy stated in his letter to PM Modi. 
 
Mr Swamy has also urged the PM to form a special investigation team (SIT) of the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), Serious Frauds Investigation Office (SFIO) and Income-tax (I-T) officials to probe into the 14-year-old long money laundering of the group by siphoning the funds of the NHB.
 
 
 
In response to the circulating letter on social media, the Indiabulls group used the stock exchange portal to address and clarify the situation. The group said:
 
1. Loans outstanding as on date from NHB to Indiabulls Housing is zero.
 
2. Indiabulls Housing, in its history, has never taken any loan or refinancing facility from NHB.
 
3. The total loan book of Indiabulls Housing is approx. Rs87,000 crore.
 
Further, in a chat with CNBC TV-18, the vice-chairman and managing director of Indiabulls Housing Finance, Gagan Banga, said, "What the NHB can do is to provide refinance to housing finance companies (HFCs). NHB does not lend to companies in general. So the only entity that could have possibly sought refinance as an HFC is Indiabulls Housing Finance.”
 
This was a case of bizarre misinformation as in its existence of 14 years as a housing finance company, Indiabulls Housing Finance has never taken any refinance from NHB, noted Mr Banga. "This misinformation is being spread over the last two-three months ever since we proposed a merger with (Lashmi Vilas) bank,” he added.
 
“Even though we have already submitted ourselves to a very delicate due diligence process where we have already submitted all of our books to the regulators, this kind of misinformation keeps coming around. It is bizarre. I could not have embezzled more than the loans outstanding. If I have not taken a facility ever, how could I have done anything wrong with it,” said Mr Banga.
 
“We have also put out the link to the refinancing part of the portal of the NHB. It is very clear that the NHB refinances HFCs or banks and how they do it, what is the procedure and process, all that is detailed there. That shell companies can potentially borrow from the NHB is beyond my imagination. There is no procedure and process around that. It has never been done and it is quite crystal clear,” he further mentioned.
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    COMMENTS

    Subhash Raskar

    1 day ago

    Swami is a fraud person, he is trying to sabotage Lashmi Vilas bank and indiabulls merger. He may be extracting money from indiabulls.

    Govinda Warrier

    3 weeks ago

    Read this report, comments recorded by readers and some more reports on the subject in the mainstream media. The allegation by Subramanian Swamy, denial by Indiabulls and the comments posted here together leave the reader in the lurch. One person has used this space for a job application also. No idea whether NHB has expressed any view. Not likely, if their funds are not involved. Probably, someone familiar with NHB refinancing may provide some clarification on Swamy's allegation as discussion here is getting hijacked from the allegation and the denial.

    Lalit Mulay

    3 weeks ago

    I am not a financial expert but it is shocking for me to understand that how are these NBFCs surviving from last 15-20 years? They borrow money on short term say for a period of 2-3 years . How can they lend to home buyers for period of 12 to 15 years. ? Is there any instruments or products where they can borrow money for 10 years? If you can't borrow for a period of 10 years how can you lend to someone for 10-12 years ? Can anybody throw a light on this or is this ballon busted after blowing to its maximum level.

    Suresh Deshmukh

    4 weeks ago

    How will the NCD Holders (Indiabulls Consumer Finance Limited Tranche II) be affected, if what Dr Swamy says is true?

    B. Yerram Raju

    4 weeks ago

    There is an old saying: if you want to rob do it in billions so that they become unrecoverable. Yet worst in Jail for a few months or years and yet come out honorably on a Independence Day or Republic Day citing good behavior!! When penalties and punishments are more attractive than compliance of regulations such things continue to happen. Tighten regulation and bad regulation cannot also go unpunished. But who will bell the cat?

    CHANDRASHEKHAR VINAYAK KAKATKAR

    4 weeks ago

    Banga says : "This misinformation is being spread over the last two-three months ever since we proposed a merger with (Lashmi Vilas) bank".
    --
    Does it mean there were no allegations against the Company before 2-3 months?
    If RBI permits the merger - does it mean the Depositors money is in safe hands?
    --
    Need guidance as I am an existing deposit holder.

    Prashanth Hg

    4 weeks ago

    t is so sad in our country that most of the listed companies headed by politician s and investor is the victim for that. To make little more money than FD they invest in stock markets and these kingpins loot their investment only. LAW says nobody is above than LAW but here it is different.
    I can give you 1000 examples like this which happened to INDIABULLS HOUSING FINANCE today but where is the LAW and what SEBI is doing?
    I have worked in BANKING &FINANCE sector for 25 years and in the recent developments like this SFIO published an article stating there are 2,27,000 + shell companies in india and they are unable to get the whereabouts of those companies. I proposed them ro appoint people like me who can support there investigation but no reply as off today. MAKES ME WONDER.
    If i get an opportunity to serve for our investors benefit i would be much obliged to help them to get the details with interest of justice.
    I HOPE SEEING TO MY ARTICLE ATLEAST SFIO SHOULD RESPONSE. I REQUEST Mr SWAMY TO THINK ABOUT MY PROPOSAL.

    Regards
    Prashanth

    REPLY

    Sreepathid

    In Reply to Prashanth Hg 3 weeks ago

    you worked in banking and finance sector for 25 years and whats your contribution ?

    sultan charaniya

    In Reply to Prashanth Hg 4 weeks ago

    I will assist you

    Ramesh Poapt

    4 weeks ago

    i hope mkt/regulators will e wiser by such incidents(and yes mutual funda
    people as well the most)

    Ajay Sharma

    4 weeks ago

    Haha, this is OLD NEWS. Rumours of this have been going around for years! I hope Moneylife takes a serious look and can bring to light the involvement of the top brass at the RBI as well.

    Suketu Shah

    4 weeks ago

    Dr Swamy has a super track record as to whatever he says is 100% correct.I am shocked Ibulls denies this knowing this.

    V ganesan

    4 weeks ago

    Scandal by Scandal one by one that too from big corporates.ultimately the loser is retail investors and small time deposit holders.no big corporate owner is punished in this country. They are allowed to run scot-free. Whether it is Congress govt or bjp govt no respite for small investors.better to put money in gold and ppf post office. Time and again manipulators cheating without any punishment.

    REPLY

    anup gawande

    In Reply to V ganesan 4 weeks ago

    In india, to go into a business and to raise a business empire you should be politically well connected. If you have a political godfather or yourself a politician then all gates are open for you.

    China hacks free trade route, chokes Punjab cycle industry
    Ludhiana, July 25 (101Reporters/IANS) Punjab's bicycle industry is huffing and puffing to survive as cheaper Chinese imports, allegedly entering India through a free trade agreement China is not even a part of, are putting them out of business.
     
    Pradeep Wadhwan, Vice President of United Cycle & Parts Manufacturers Association (an umbrella organisation of cycle manufacturers of Ludhiana), told 101Reporters that 200 bicycle manufacturing units have had to shut shop in the face of the competition. He said owners of these units have either switched their business or have become dealers of bicycle parts.
     
    At the heart of bicycle manufacturers' grouse is how China has gatecrashed the Indian market through the South Asian Free Trade Area (SAFTA) pact, which came into effect in 2006. The agreement paved the way for the eight member countries to reduce customs duties of all goods traded among them to zero by 2016. China isn't a party to the pact but is still reaping its benefits. 
     
    Badish Jindal, president of the Federation of Punjab Small Industries Associations, said China has been placing its proxies in Bangladesh and Sri Lanka. He said the Asian superpower has been supplying its bicycles in India through these SAFTA countries, dodging the customs charges it would have had to add to the item's cost.
     
    He said the tariff-free trade route has come as a curse for the bicycle industry of Ludhiana. "It is surprising and impossible that countries like Sri Lanka and Bangladesh, which had no or little cycle industry, started manufacturing every cycle part within a few years and their exports to India swelled to millions within a short duration of time." 
     
    Government data on bicycle imports shows that as imports from China fell from Rs 262.7 crore in 2011-12 to Rs 153.8 crore the next year, Bangladeshi and Sri Lankan imports picked up rapid pace. This trend continued till 2015-16, when Chinese imports dropped to Rs 67 crore and Bangladeshi and Sri Lankan imports reached an all-time high. (However, import from China grew again between 2016 and 2018 as imports from Bangladesh slid.)
     
    India did not import bicycle or cycle parts from Bangladesh between 2006 and 2010. It was only in 2011 when imports worth Rs 5.1 lakh took place. The next year saw imports to the tune of Rs 1.4 crore. The meteoric rise continued till 2016-17, when the figure reached Rs 41.2 crore. While Sri Lanka had exported bicycles and cycle parts worth Rs 1.1 crore to India in 2006-07, the number touched Rs 81.1 crore in 2017-18.
     
    Industry analysts opine that the government needs to take steps to protect the future of the country's bicycle sector. S.C. Ralhan, former President of Federation of Indian Export Organizations, said the government needs to check any misuse of the free trade route so that the interests of the local manufacturers are not compromised. 
     
    Jindal said Ludhiana's bicycle industry has raised the issue several times and written to the Centre but hasn't received a satisfactory response. 
     
    There are about 4,000-4,500 cycle manufacturing units in Ludhiana. Most of these small units supply cycle parts to bigwigs like Hero and Avon, also located in the city. The bicycle industry in Ludhiana is under stress as it is as the major players have opened manufacturing units in other states too.
     
    India is said to be the world's second-largest bicycle manufacturer, with an annual turnover of Rs 6,000 crore.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Ashish Chahal

    3 weeks ago

    We live in a world where we have partial knowledge. People build businesses which requires calculations and numbers science. But what about god? Faith? Is there a god, is there life after death etc. There is so much unknown. People on top of the game in business start struggling in other areas. A lot of our beliefs are built on dogma and at the top these beliefs start crumbling. You can go up by being the blue eyed boy. But what when there is no one to be blue eyed boy to? He knew how to climb the ladder but then what was left than to jump off it? Its tough to deal with 'nothing'. Shiva claimed him.

    NDDB Managed Jharkhand Milk Federation Emerges Hotbed of Corruption in Lokayukta Enquiry
    An enquiry conducted by a three-member team appointed by the Jharkhand lokayukta has revealed several incidents of corruption in the Jharkhand State Cooperative Milk Producers’ Federation (JMF) which is managed by National Dairy Development Board (NDDB). 
     
    These findings match with what a whistleblower, Abhay Muley, has been pointing out since the past few years. In fact, Mr Muley, a former manager in NDDB, fighting a lonely battle, has been badly victimised, been without pay for over eight months and is facing action by the Board. He has even filed a complaint with the prime minister and the lokayukta of Jharkhand. 
     
    The lokayukta committee has found that officials from NDDB and JMF bought several items of equipment, like boilers and cream separators, which are lying unused for years due to a mis-match in capacity. As per information provided by JMF to the committee, they had issued an advertisement in two newspapers for the purchase of boilers. However, they eventually bought boilers from a company which had not even submitted a tender or proposal, the committee report says. 
     
    In March this year, the lokayukta of Jharkhand had directed the secretary, department of agriculture, animal husbandry and cooperatives in the state, to identity persons accused of corruption and take appropriate action against them. The secretary has yet to submit an action taken report to the lokayukta office. 
     
    After signing a memorandum of understanding (MoU) with the Jharkhand government in 2014-15, NDDB deployed its team in the state resulting in JMF taking over milk procurement, processing and marketing activities through Ormanjhi, Koderma and Deoghar dairies. In August 2014, NDDB took over existing government dairy at Ormanjhi and two other dairies at Deoghar and Koderma in September 2014. 
     
     
    The whistleblower says he noticed equipment such as a boiler and cream separator worth crores of rupees were either purchased without being of any use or with absolutely mismatched capacities. "For example, Thermax boilers were purchased in December 2015 and were lying idle until late 2018 in Deoghar, Koderma and Latehar. Similarly, cream separators purchased from GEA and skid mount chillers purchased from Indian Dairy Machinery Company Ltd (IDMC), a unit of NDDB, were of a gross mis-match in capacity as per the existing dairy plants in Deoghar and Koderma. So basically, these equipments were not fit for the dairy plants and it was like putting a square into a circle," he says. 
     
    "These purchases were made without following any tender procedure and without any valid necessity and only to waste the Jharkhand government’s money to extract kickbacks from NDDB's favourite vendors such as IDMC and GEA," he alleges.
     
    During November-December 2015, JMF bought three Husk briquette boilers worth Rs24.42 lakh, and GEA cream separators worth Rs47.82 lakh from a German company. Two of the Husk briquette boilers are still lying idle at Koderma and Latehar, while one of them has been recently installed in Deoghar.
     
    "JMF purchased cream separators from GEA and selected the same without any public tender. The capacity of GEA cream separator purchased does not match with the capacity of dairy plant. Moreover, since cream separators were purchased of high capacity, but there was no arrangement made to handle the separated cream. For example, in Koderma there is no facility to make Ghee and there is no supply of full cream milk (with 6% fat and 9% solids-not-fat -SNF). Since there is no Ghee making facility and no disposal in full cream milk, no body thought that what would be done after separating so much cream through high capacity GEA separators. GEA company also do not have any local after-sales service support in Bihar and Jharkhand," the whistleblower had said in his complaint.
     
    The whistleblower has alleged about nine instances where, according to him, corruption has taken place, in addition to kick-backs given to some top officials of NDDB. 
     
    1. Aasma Dairy Scam: Medha Dairy of JMF sent surplus milk to convert it into powder to Aasma Dairy. However, after taking supply worth Rs5 crore over few months, the owner of Aasma Dairy became untraceable. The dues were settled later, after deduction of some charges by the private dairy owner.  
     
    2. Outstanding Dues: JMF supplied milk and other products to a number of distributors, agents and vendors on credit, without any security or payment resulting in defaults. Some cases of recovery are now pending in courts.
     
    3. Diesel Scam: At Koderma plant, diesel purchase and its consumption in valid log sheet register duly signed by working operator and shift incharge on daily basis was not maintained. However, these bills were approved by higher authorities and paid.
     
    4. Citric Acid Scam: Unnecessary indent and purchase of citric acid, used in making of paneer, was prepared and money paid to parties. The plant staff showed heavy consumption of citric acid, which needs separate investigation.
     
    5. Boiler and Cream Separator Purchase: These items were purchased without necessity and only with an intention to extract pecuniary advantage out of this purchase. Public money was spent for unnecessary expenditure for personal gains.
     
    6. Milk Cans Scam: No record is available of purchase of SS/aluminium cans and distribution to plants by JMF. In addition, several milk procurement staff have taken deposit of Rs1,000 from dudhmitra of respective milk pooling point but this money is not deposited in the bank account of JMF from 2014 till date.
     
    7. Milk Crates Scam: More than 15,000 milk crates were stolen (sold the milk with crate without challan and gate-pass in open market) from Hotwar dairy at Ranchi. The same situation prevails in several plants. This was done so that milk can be sold to vendors without valid challan and the money can be received by vested interests.
     
    8. Stealing of Milk During Transportation: The milk is transported from villages to Medha dairy as well from Medha dairy to other in milk tankers. During this operation, some quantity of milk is stolen by a syndicate of people and sold in the open market. To maintain the volume, they add water in the milk stored in tankers. The staff who checks the quality (fat & SNF) is bribed by the syndicate to give the receipt of same quality (fat & SNF) as is mentioned in the challan.
     
    9. Recruitment of Employees And Consultants: There was misappropriation and corruption in recruitment of employees in JMF. Candidates, who could not even pass the interview were appointed. Former MD of JMF appointed several people as consultants on higher payment terms.
     
    Here are the specific charges levelled by the whistleblower in his complaint to the lokayukta of Jharkhand which we are presenting without editing or grammar correction:
     
     
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    COMMENTS

    Ramesh Poapt

    4 weeks ago

    OMG!!!

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