Mumbai: The ministry of home affairs (MHA) has issued a lookout notice against promoters of Dewan Housing Finance Corporation (DHFL) in connection with allegations of financial fraud by promoters of the company. According to sources, the company is being investigated for alleged siphoning of funds through shell companies.
DHFL stock plunged more than 3.5 per cent on Tuesday on reports that the MHA had issued a lookout notice against the promoters of the company over non-existent shell companies.
The stock has declined about 55 per cent this year and 82 per cent in the last one year.
In fact, in January this year, the news portal Cobra Post had accused that DHFL promoters, through layers of shell companies, allegedly siphoned off Rs 31,000 crore out of the total bank loans of Rs 97,000 crore taken by them.
It was reported that an investigation by the Ministry of Corporate Affairs (MCA) had revealed that addresses provided by DHFL subsidiaries are fictitious.
However, DHFL denied receiving any communication from the government with reference to the lookout notice.
The company said, "its promoter-directors have not received any communication from the authorities regarding issuance of any look-out notice".
It said, "The company is currently focused in getting a strategic partner, fulfilling all its obligations on time and in building strategy for the company's back-to-business growth. As reiterated in the past, we deny all allegations of existence of any alleged shell companies.”
The MCA had last week asked the MHA to issue lookout notice against DHFL promoters to prevent them from leaving India till the investigation was completed.
In its expose, Cobra Post alleged that the mega scam had been carried out by sanctioning and disbursing huge amounts in secured and unsecured loans to dubious shell or pass-through companies related to DHFL's primary stakeholders, Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan.
It alleged that this was done through their proxies and associates, which had in turn passed the money on to the companies controlled by the Wadhawans.
In a bid to avoid economic offenders from a potential flight risk, the MCA is understood to have suggested over 20 names against whom look out circulars (LOCs) have been issued, according to a news channel report.
The government has decided to tighten the noose around companies, promoters and directors involved in serious fraud and irregular transactions.
The LOCs will be based on suspicion on tightening of fund, said the sources, adding that the MCA will follow a standard operational procedure to deal with such cases. The LOCs will be valid until the cases go to the court....