May 14th 2024.
The Central Bureau of Investigation (CBI) has taken former Director of Dewan Housing Finance Limited (DHFL), Dheeraj Wadhawan, into custody for his alleged involvement in a massive fraud case. According to officials, Wadhawan was arrested on Monday night in Mumbai and was brought before a special court in New Delhi on Tuesday. The court remanded him to judicial custody.
This is not the first time that Wadhawan has been arrested in connection with this case. He and his brother Kapil were previously arrested on July 19, 2022. The CBI had also filed a charge sheet against 75 entities, including the Wadhawan brothers, on October 15, 2022. However, they were granted bail on December 3, 2022, due to incomplete investigations and a piecemeal charge sheet. This decision was later upheld by the Delhi High Court.
The CBI, however, challenged this decision in the Supreme Court and it was overturned. The apex court noted that both the Special Court and the High Court had disregarded legal precedents in granting bail. In the meantime, Wadhawan had obtained interim bail from the Bombay High Court on medical grounds and was receiving treatment at Lilavati Hospital. The High Court had regularized this bail on May 2, 2023, and extended his protection from arrest by the CBI for one week. However, once this period was over, Wadhawan was taken into custody by the CBI.
At present, three accused are in judicial custody - Dheeraj Wadhawan, Kapil Wadhawan, and Ajay Nawandar. The CBI had booked the Wadhawan brothers and others based on a complaint from Union Bank of India, the leader of a consortium of 17 banks that had provided loans worth Rs 42,871 crore to DHFL between 2010 and 2018.
The CBI's charge sheet alleges that the Wadhawans, along with others, had committed a criminal conspiracy by misrepresenting and concealing facts, breaching trust, and misusing public funds. They are accused of cheating the consortium to the tune of Rs 34,615 crore by not repaying the loans from May 2019 onwards. The agency also claims that DHFL was involved in financial irregularities, diversion of funds, and falsification of records to create assets for the Wadhawan brothers using public money.
The CBI also found that the loan accounts of DHFL were declared non-performing assets by the lender banks at different times. In January 2019, when the company came under investigation following media reports of fund mismanagement, the lender banks held a meeting and hired KPMG to conduct a special review audit of DHFL's books from April 1, 2015, to December 31, 2018. The audit revealed that funds had been diverted to related entities and individuals, including the promoters of DHFL, through loans and advances.
Further scrutiny of the account books showed that 66 entities with connections to the Wadhawan brothers had received loans worth Rs 29,100 crore, of which Rs 29,849 crore were still outstanding. The CBI alleges that most of these transactions were made for investments in land and properties. This massive fraud has caused major losses to the lender banks and has greatly impacted the financial sector. The CBI continues to investigate the case and bring all those involved to justice.
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