Former DHFL Director Dheeraj Wadhawan has been arrested by the CBI in connection with an alleged defrauding case involving a 17-member lender bank consortium. The amount involved in the fraud is reported to be Rs 34,000 crore. Wadhawan was apprehended in Mumbai and presented before a special court, which subsequently remanded him in judicial custody.
It’s worth noting that Wadhawan’s brother Kapil was also arrested earlier in the same case on July 19, 2022. The CBI had filed a charge sheet against 75 entities, including Kapil and Dheeraj, on October 15, 2022.
However, both brothers were granted “statutory” bail by the special court on December 3, 2022, based on the grounds that the investigation was incomplete and the charge sheet filed was piecemeal. This decision was further upheld by the Delhi High Court. The CBI, dissatisfied with the decision, challenged it in the Supreme Court, which eventually set aside the bail orders, stating that the Special Court and the High Court had disregarded the legal position established by the apex court.
In the interim, Dheeraj Wadhawan obtained interim bail from the Bombay High Court on medical grounds. He was admitted to Lilavati Hospital for treatment. On May 2 of this year, the Bombay High Court regularized his bail in that separate case and extended his protection from CBI arrest for a week.
The CBI arrested Wadhawan once the protection period was over. Currently, three individuals, including Dheeraj Wadhawan, Kapil Wadhawan, and Ajay Nawandar, are in judicial custody. The CBI initiated the case against the Wadhawan brothers and others based on a complaint from the Union Bank of India, which led the 17-member lender consortium that had provided credit facilities to DHFL totaling Rs 42,871 crore between 2010 and 2018.
The charge sheet filed by the CBI alleges that Kapil and Dheeraj Wadhawan, along with others, engaged in a criminal conspiracy, misrepresentation, and concealment of facts. They are accused of committing a criminal breach of trust and misusing public funds to defraud the consortium of Rs 34,615 crore by defaulting on loan repayments starting from May 2019.
The CBI further alleges that DHFL committed financial irregularities, diverted funds, fabricated books, and engaged in round-tripping of funds to benefit Kapil and Dheeraj Wadhawan using public money. The officials confirm that DHFL loan accounts were declared non-performing assets by the lender banks at various points in time.
In January 2019, when DHFL faced investigation following media reports of fund siphoning allegations, the lender banks held a meeting on February 1, 2019. KPMG was then appointed to conduct a “special review audit” of DHFL from April 1, 2015, to December 31, 2018.
The audit revealed the diversion of funds disguised as loans and advances to entities and individuals related to DHFL and its directors.
According to the CBI, scrutiny of the account books revealed that 66 entities linked to DHFL promoters received loans totaling Rs 29,100 crore, out of which Rs 29,849 crore remained outstanding. Most of these entities and individuals allegedly used the funds for investments in land and properties.