Ministry to Order SFIO Probe into Financial Fraud in DHFL
The Corporate Affairs Ministry will soon order the Serious Fraud Investigation Office (SFIO) to probe into the alleged financial irregularities at the troubled housing finance company (DHFL), an official source said on Tuesday.
The Registrar of Companies' (RoC) regional office in Mumbai has recommended action by the SFIO against DHFL in its report submitted to the Corporate Affairs Ministry two days ago, the official said.
There is enough concrete evidence of financial irregularities by DHFL, while the report points to fund diversion and siphoning, the source added.
According to the source, the ministry is currently studying the report and will very soon refer it to the SFIO for further action.
A non-banking finance company (NBFC), the Dewan Housing Finance Corp (DHFL) had earlier said it was working on a debt resolution plan with lenders to protect the interests of its stakeholders.
As of July 6, 2019, DHFL had a total debt of about Rs 1 lakh crore, in which banks have an exposure of Rs 38,342 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.
DHFL, which is the country's third largest mortgage lender, had sought a Rs 15,000-crore fund support from creditors to start giving loans to viable projects while their lenders finalise the resolution plan. The plan could also include picking up 51 per cent equity in the company by converting their debt into equity.
Audit firm KPMG, which has carried out a forensic audit of DHFL, has submitted a draft report to the lenders. Initiated by the lenders, the findings of the forensic audit can affect a proposed debt-restructuring plan aimed at reviving DHFL. It may also prompt these lenders to push for a management change in the Wadhawan family-run company.
The DHFL stock closed on Tuesday at Rs 15.90 a share, down 4.79 per cent on its previous close on the BSE.