Centre orders SFIO probe into debt-laden DHFL, 5 other real estate firms

Investigation report has not gone into the involvement of banks and officials

The government has ordered a Serious Fraud Investigation Office (SFIO) probe into the affairs of Dewan Housing Finance (DHFL) and five real estate companies, Anurag Thakur, minister of state for corporate affairs, told the Lok Sabha on Monday.

The five realty companies that will be investigated by the SFIO include Immediate Real Estate, Tenancity Real Estate, RKW Developers, Darshan Developers, and Rajen Skycraper.

The ministry of corporate affairs had received the investigation report of DHFL from the regional director – western region on October 24.

“The investigation of DHFL and five others have been assigned to the SFIO on November 6 and the time for completion cannot be indicated as of now,” Thakur said.
 

He also said that the inspection report submitted by the regional director (western region) has not gone into the involvement of banks and officials. The report provided details of loans worth Rs 95,615 crore taken by the fourth-largest housing finance company in India based on outstandings as on March 31.

A recent forensic audit report by KPMG said the promoters siphoned off Rs 20,000 crore from DHFL to various entities, with no proper entries on the end-use of funds. 
 

Last week, the Reserve Bank of India (RBI) superseded DHFL’s board, citing governance concerns and defaults, intending to shortly “initiate the process of insolvency” against the company.

DHFL came in the eye of a storm after a report by Cobrapost said the company, through layers of shell companies, allegedly siphoned off money and committed financial fraud.

The Enforcement Directorate (ED) is also probing the property deals of DHFL for alleged connection with late gangster Iqbal Memon.

Exposure of the non-banking finance company (NBFC) came to light when the enforcement agency had arrested Iqbal Memon alias Iqbal Mirchi’s close aides — former chairman of Sir Mohamed Yusuf Trust, Haroun Yusuf, and real estate broker Bindra last week.

The agency is also examining a real estate transaction worth Rs 121 crore between Essential Hospitality (EHPL), a DHFL associate group firm, and Charak Pharma, an entity controlled by Raj Shroff, son-in-law of Sushilkumar Shinde, former Maharashtra chief minister and ex-Union home minister.

Besides the SFIO and ED, the NBFC is under scanner by government agencies, including the Central Bureau of Investigation (CBI). 

The CBI was ordered by the Uttar Pradesh (UP) government to look into money from UP Power Corporation’s employee provident fund trusts that was invested in DHFL.