An arrest has been made in relation to the Dewan Housing Finance Corporation Ltd (DHFL) bank fraud. The accused who was arrested on Tuesday, 14 May 2024 identified as Dheeraj Wadhawan. In an ongoing investigation, the Central Bureau of Investigation (CBI) received intel that Wadhwan has played a significant role in the fraud of ₹34,000 crore Dewan Housing Finance Corporation Ltd. It is worth noting that Wadhawan is the former director of DHFL and his arrest news has been officially shared by the officials who are working on this case.
Before arresting him, Wadhwan was taken into custody from Mumbai and after his arrest, he was produced before a special court on Tuesday in Delhi. The court has sent him to judicial custody. DHFL scam pertains to the alleged swindling of a consortium of 17 banks and is being termed as the largest baking loan scam in India. It is not the first time the name of Wadhwan has been dragged into the matter, even in 2022, the CBI has already lodged a charge sheet for his alleged involvement in this scam. It is the second time that the central agency has arrested him as he was earlier taken into custody in the Yes Bank corruption case and consequently released on bail.
What is the ₹34,000 DHFL scam?
As per the central probe agency’s charges, the former promoter and his brother Kapil reportedly defrauded a consortium of 17 banks to the tune of ₹34,000 crore. As mentioned above, this case has been considered one of the biggest baking loan frauds in the nation. Dheeraj and Kapil Wadhawan, along with others, are charged with engaging in a criminal conspiracy, concealing, and misrepresenting facts, committing a criminal breach of trust, and profaning public funds according to the charge sheet.
This reportedly resulted in cheating the consortium of ₹34,615 crore by defaulting on loan repayments from May 2019 onwards. The central agency has alleged the firm is involved in financial irregularities, falsifying records, involvement in circular transactions, and fund diversions to “generate assets for Dheeraj and Kapil Wadhawan” using public collections. To recover pending dues of approximately Rs 22 lakh, the Securities Exchange Board of India (SEBI) ordered the attachment of bank accounts, mutual fund holdings, and shares of former DHFL promoters in February 2021.
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The Wadhawan brothers’ inability to pay the fee levied on them in July of last year for violating disclosure standards led to the ruling. In July 2023, SEBI released a penalty of Rs 10 lakh each against each of the Wadhawan, and DHFL promoters. The penalty was for revealed transgressions of disclosure regulations. At the time of his term with DHFL, Dheeraj Wadhawan served as a non-executive director and Kapil Wadhawan was appointed as the Chairman and Managing Director. Both Wadhwans were part of the administrative board of DHFL.
Besides that, the Delhi High Court released a notice to the CBI in response to the bail application of Dheeraj Wadhawan last Saturday, 11 May 2024. Dheeraj submitted his bail application on medical grounds. His application was rejected by the trial court and then he submitted his application in high court. He appealed to get interim bail in the wake of medical reasons. At present, Wadhawan is convalescing at his Mumbai residence after spinal surgery.