DHFL, ex-CMD Kapil and director Dheeraj Wadhawan booked by CBI in Rs 34,615 crore bank fraud

A team of over 50 officials from the agency carried out searches on 12 premises in Mumbai on Wednesday belonging to the accused. These premises included those of Sudhakar Shetty of Amaryllis Realtors and eight other builders.

According to the audit of DHFL account books, the company allegedly committed financial irregularities to "create assets for Kapil Wadhawan and Dheeraj Wadhawan" using public funds.

Both men are  in judicial custody in relation with previous fraud investigations against them.

DHFL-Yes Bank case: CBI searches premises of realtors in Mumbai, Pune

The lender banks, on February 1, 2019, appointed KPMG to conduct a "special review audit" of DHFL from April 1, 2015 to December 31, 2018, after media reports surfaced about siphoning of funds at DHFL in January 2019.

The scrutiny of the account books revealed 66 entities, having commonalities with DHFL promoters, were disbursed Rs 29,100 crore against which Rs 29,849 crore remained outstanding.

The UBI alleged that in its audit, KPMG identified diversion of funds disguised as loans to related and interconnected entities and individuals of DHFL and its directors.

"Most of the transactions of such entities and individuals were in the nature of investments in land and properties," the bank alleged.

DHFL accounts had Rs 11,909 crore arising out of loans and advances worth Rs 24,595 crore given to 65 entities between April 1, 2015 and December 31, 2018.

In October, 2019, the consortium issued a Look Out Circular against Kapil and Dheeraj Wadhawan to prevent them from leaving the country.

Also read: Yes Bank-DHFL case: Rana Kapoor, Wadhawans laundered money worth Rs 5,050 crore, says ED

DHFL and its promoters listed Rs 14,000 crore, disbursed as Project Finance, as retail loans in their books.

A separate database of loans, under the name "Bandra Books", were maintained and was later merged with Other Large Project Loans (OLPL).

"It was revealed that OLPL category was largely carved out of the aforesaid non-existent retail loans amounting to Rs 14,000 crore, out of which Rs 11,000 crore was transferred to OLPL loans and Rs 3,018 crore was retained as a part of retail portfolio as unsecured retail loans," it alleged.

The accused and those allegedly involved in the fraud maintained that they were trying to de-stress the company through various means like securitization of pool of housing loans, project loans, divestment of promoters' stake in the company, they said.

Kapil Wadhawan maintained that DHFL has six months of cash liquidity and would remain cash surplus even after considering all repayment obligations, the consortium alleged.

DHFL "falsely assured" lenders, so it delayed interest payments on terms loans in May 2019, which continued thereafter with the accounts declared non-performing assets, the complaint said.