An Investigative platform i.e Cobrapost on Tuesday asserted that the primary promoters of Dewan Housing Finance Corporation (DHFL), a non-banking financial entity and their associate companies had committed a “systemic fraud” to illegally drawn off public money through secured and unsecured loans and advances to shell companies, round tripping, tax avoidance and insider trading and root out a banking scam of more than ₹31,000 crore.

“Money has also been routed through these dubious companies and parked outside India, to acquire assets,” the website said.

To the charges, DHFL  on a statement responded that  “This mischievous misadventure by Cobrapost appears to have been done with a mala fide intent to cause damage to the goodwill and reputation of DHFL and resulting in erosion in shareholder value. DHFL today (Tuesday) received an email at 8.44 a.m., with a follow-up reminder one hour later, seeking answers to 64 questions from Cobrapost, many of which were laced with political innuendos. Their entire approach raises serious concerns about the motivation of this so-called expose,” . DHFL said the company, which had received AAA credit rating from leading credit agencies, was fully tax compliant and its books are audited by global auditors. “We understand, for the last several weeks, an anonymous note has been making the rounds with similar defamatory and scurrilous allegations. The real intent of this exercise appears to be to destabilise the company and the market equilibrium besides hampering our meeting the on-going obligations,” it said, also questioning the timing as the charges were levelled before the stock market closed and days before the interim Budget.

Cobrapost claimed to have identified 45 companies that were allegedly used to illegally drawn off funds. “Of these, 34 companies are so dubious that most of them have no business or income, as many of these companies operate from the same addresses and are run by the same group of initial directors,” it alleged.

The allegations came on a day when DHFL announced that it had raised ₹1,375 crore from funds managed by Oaktree Capital Management.

Cobrapost alleged that by lending funds without due diligence, DHFL ensured that recovery was impossible as the firms or their directors did not own any assets.

“Thus, the only losers in the process would be the public sector banks, such as State Bank of India and Bank of Baroda, with an exposure of over ₹11,000 crore and ₹4,000 crore, respectively, foreign banks and shareholders from among the public or investors of DHFL,” it alleged.

Offering for BJP

The website also said that donations of ₹19.5 crore had been given to the BJP between 2014–15 and 2016–17 by RKW Developers Pvt Ltd, Skill Realtors Pvt Ltd and Darshan Developers Pvt Ltd,  donors linked to the Wadhawans. “These charities, however, flout the provisions of Section 182 of the Companies Act, 2013, which govern corporate funding to political parties,” the statement said.

Further, the website said the Wadhawans ensured loans were granted to shell/pass-through entities and the money ultimately ended up in the companies owned or controlled by them. “Understandably, there have been serious violations of several civil and criminal laws and regulations. There is a massive deviation both from the industry practice on the lending policy of the company and from the good corporate governance norms of the company,” the statement added.

However, the DHFL statement insisted all loans are disbursed by the company in compliance with regulatory norms. The company’s financial statements are submitted to the stock exchanges and are in the public domain, it added. “DHFL and its group companies are confident of meeting any scrutiny on any aspect of our operations and will pursue these frivolous allegations to its logical conclusion,” it said.

DHFL, with a net worth of ₹8,795 crore, had taken loans of ₹96,880 crore. “Of this sum, the company has disbursed ₹84,982 crore in loans and advances to other entities. According to the annual report, DHFL has secured loans from at least 36 banks, including 32 nationalized and private and six foreign banks,” it alleged.