Sebi confirms directions passed against 12 promoters of DHFL

Markets regulator Sebi on Friday confirmed the directions passed against twelve promoters of DHFL which barred them from accessing securities market.

A detailed investigation in the matter is pending.

The promoters are -- Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan, Sarang Wadhawan, Aruna Wadhawan, Malti Wadhawan, Anu S Wadhawan, Pooja D Wadhawan, Wadhawan Holding Pvt Ltd, Wadhawan Consolidated Holding Pvt Ltd, Wadhawan Retail Venture Pvt Ltd and Wadhawan Global Capital Ltd (formerly known as Wadhawan Housing Pvt Ltd).

In an interim order passed in September 2020, Sebi had restrained them from accessing securities market and had also barred them from associating themselves as directors or promoters of any listed public company or associating with any intermediary registered with Sebi.

The order had been passed after a transaction auditor raised serious concerns over authenticity and reliability of DHFL's financial statements for the period of financial years 2007-2019.

The firm raised Rs 24,000 crore through public issue of debt securities during this period.

Sebi noted that DHFL entered into certain fraudulent transactions, which were shown as bonafide transactions in its published financial statements as well as corporate announcements disseminated in the public domain.

In its confirmatory order passed on Friday, Sebi said that pursuant to the passing of the interim order, the final report has also been submitted by the transaction auditor and the findings of the initial report which were relied upon by Sebi have been confirmed in the final report.

"The final report also states DHFL was maintaining a parallel set of books of accounts related to fictitious loan accounts given by the company," Sebi said.

The report finds that loans were advanced to entities with weak financial strength without taking sufficient collateral and many of such entities in turn invested a portion of the loan amount in companies linked to the promoters of DHFL, it added.

Sebi has thus confirmed the directions contained in the interim order pending the completion of the investigation in the matter.

"This order shall come into force with immediate effect," Sebi said.