DHFL allegedly used various shell corporations to siphon more than ₹ 31,000 crores of public money for the personal gains of the DHFL's primary stakeholders: Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan.
Yesterday, Dheeraj Wadhawan, the main accused in India’s biggest bank fraud was sent to judicial custody after he was produced before a special court in Delhi. He was out on bail. In July 2022, the Wadhawan brothers – Kapil and Dheeraj, who were former Dewan Housing Finance Limited or DHFL promoters, were arrested for allegedly defrauding 17 banks in a multi-crore scam. DHFL banking fraud has been tagged as the country’s biggest scam in the banking industry after ABG Shipyard’s fraud case of Rs 20,000 crore which was reported earlier this year.
The Yes Bank-DHFL case started on March 8, 2020, when the CBI booked Rana Kapoor, the founder of Yes Bank, and Kapil Wadhawan, former CMD of DHFL, on charges of criminal conspiracy and cheating under the Prevention of Money Laundering Act, 2002. The CBI had alleged that Yes Bank under Rana Kapoor, former managing director and chief executive officer (CEO), had disbursed Rs 3,983 crore to Dewan Housing Finance Limited (DHFL). According to the CBI FIR, the scam started taking shape between April and June 2018 when Yes Bank invested this money in short-term debentures of DHFL.
DHFL’s troubles started in January 2019 following a sting operation by Cobrapost that alleged that the company had siphoned off money to related entities. On 29 January 2019, Cobrapost, an Indian investigative journalist group, published an exposé of DHFL for using various shell corporations to siphon more than ₹ 31,000 crores of public money for the personal gains of the DHFL's primary stakeholders: Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan. In the same article, Cobrapost also raised allegations of political donations worth crores of rupees, in violation of Section 182 of Companies Act, 2013 for political donations.
Following this, credit rating agencies started downgrading its paper in June 2019. DHFL started defaulting on its repayments in July 2019. Cases were filed against DHFL by depositors. One was filed by IAS officer Ashok Khemka on behalf of his wife at the Chandigarh High Court while the other one was by Edelweiss AMC in Bombay High Court.
In July 2022, the CBI booked former promoters of DHFL, Kapil Wadhawan and Dheeraj Wadhawan, among 13 others in connection with the case after a complaint was filed by the Union Bank of India (UBI). UBI, which is the leader of a 17-member lender consortium, claimed that it extended credit facilities to DHFL to the tune of Rs 42,871 crore between 2010 and 2018. The consortium said of the total amount, Rs 34,615 crore is still outstanding. The loan was declared NPA in 2019 and fraud in 2020.
In 2010, the Wadhawans or RKW family split their business by mutual agreement to create Housing and Development Infrastructure Limited (HDIL), and Dewan Housing Finance Limited (DHFL). But both firms were charged in separate scams in 2019. HDIL is also linked with the Rs 4,300 crore Punjab and Maharashtra Cooperative (PMC) Bank scam case.
It has been reported multiple times in the past that after their arrests, Wadhawan brothers had spent more time in a luxury hospital than behind bars. Dheeraj divided his time between hospitals. These stays included a 10-month stint at Mumbai’s Kokilaben Dhirubhai Ambani Hospital.
They used to leave the prison on the pretext of medical examinations, but visited the hospital parking lot to meet his family and business associates. They were often seen enjoying meals, and beverages and engaging in conversations, using laptops, and mobile phones, and were seen signing documents in the hospital.
Recently, Dheeraj Wadhawan was denied medical bail by a special court which observed he had not paid Rs 24 lakh for police escort provided to him during his long hospitalisation.
DHFL was established and incorporated by Rajesh Kumar Wadhawan on 11 April 1984. The name of the company was changed to Dewan Housing Development Finance Ltd. and later to Dewan Housing Finance Corporation. DHFL was established to enable access to economical housing finance to the lower and middle income groups in semi-urban and rural parts of India. DHFL is the second housing finance company to be established in the country. In September, 2021 Piramal group completed the acquisition of DHFL for Rs 34,250 crore.
A Moneycontrol report from March, 2024 says that India witnessed a worth of 5.3 lakh crore bank frauds in the last 10 years. The biggest ones are: Yes Bank-DHFL Scam, ABG Shipyard’s fraud, Nirav Modi case, Vijay Mallya, and so on.
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