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Subramanian Swamy Accuses Indiabulls of 1 Lakh Crore Fraud; Indiabulls Denies
Moneylife Digital Team 29 July 2019
Economy & Nation
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.
Comments
Subhash Raskar
5 years ago
Swami is a fraud person, he is trying to sabotage Lashmi Vilas bank and indiabulls merger. He may be extracting money from indiabulls.
Reply
Govinda Warrier
5 years 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.
Reply
Lalit Mulay
5 years 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.
Reply
Suresh Deshmukh
5 years ago
How will the NCD Holders (Indiabulls Consumer Finance Limited Tranche II) be affected, if what Dr Swamy says is true?
Reply
B. Yerram Raju
5 years 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?
Reply
CHANDRASHEKHAR VINAYAK KAKATKAR
5 years 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.
Reply
Prashanth Hg
5 years 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
Replied to Prashanth Hg comment 5 years ago
you worked in banking and finance sector for 25 years and whats your contribution ?
Reply
sultan charaniya
Replied to Prashanth Hg comment 5 years ago
I will assist you
Reply
Ramesh Poapt
5 years ago
i hope mkt/regulators will e wiser by such incidents(and yes mutual funda
people as well the most)
Reply
Ajay Sharma
5 years 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.
Reply
Suketu Shah
5 years ago
Dr Swamy has a super track record as to whatever he says is 100% correct.I am shocked Ibulls denies this knowing this.
Reply
V ganesan
5 years 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
Replied to V ganesan comment 5 years 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.
Reply
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