DHFL’s fake branch used to siphon money, says ED


2021-02-16 00:15:10

MUMBAI: Promoters of Dewan Housing Finance Corporation Ltd (DHFL) had opened a fictitious branch in Bandra which boasted of over two lakh dummy homebuyers and had been created to siphon off Rs 12,000 crore, according to information obtained by the Enforcement Directorate from DHFL senior executives.
The promoters diverted the money to around 80 shell construction companies after showing it as loans against the name of homebuyers under the subvention scheme. Under this scheme, the buyer pays the initial amount, and the bank pays the loan amount to the developer as the construction progresses, while the interest portion on the loan disbursed is paid by the developer. Buyers don’t have to pay interest on home loan till the property remains under construction or for the period agreed on.
The DHFL senior executives told ED that the Bandra branch, shell companies and dummy homebuyers existed only on paper. They also explained the modus operandi adopted by DHFL promoters Kapil Wadhawan and Dheeraj Wadhawan aka Baba Dewan to siphon off Rs 12,000 crore.
The ED documents stated that DHFL was using Synergy software to maintain its loan customers’ records. DHFL CMD Kapil Wadhawan was using a different software (Tally) to maintain the loan disbursed to shell companies. The loan to these shell companies was disbursed in bulk, but in DHFL Synergy system, it was shown as loan to different homebuyers (dummy).
Wadhawan also had a customised FOXPRO software, in which when they entered a disbursed loan amount, it would create thousands of bogus homebuyers with fake details to adjust the amount against their names. Details of these bogus homebuyers were added into the DHFL’s Synergy system which would maintain a record of lakhs of their genuine customers (homebuyers).
Jayesh Khona, vice-president of special projects at Kapil Wadhawan’s office, told ED officials in his statement that accounts of 80 shell companies were mentioned in the Tally system, which had no link with the balance sheet of DHFL. Khannna told ED officials that in 2013, DHFL got an income-tax notice regarding TDS in respect of some shell companies and that the fictitious Bandra branch was controlled by CMD’s (Kapil Wadhawan) office.
Priya Naik, senior manager at DHFL, told ED she was handling the FOXPRO system for Bandra branch to create dummy homebuyers on Kapil Wadhawan’s instructions. She told ED officials that the Bandra branch did not exist physically but only in the database.



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