DHFL scrip price surge over 20% after audit report on Cobrapost charges

The Dewan Housing Finance Corp Ltd (DHFL) stock price surged over 20 per cent on Wednesday after the company said in a regulatory filing that an independent Chartered Accountant's firm found no evidence showing that DHFL created shell companies to divert funds.

In January, the investigative media outlet Cobrapost claimed that the primary promoters of DHFL siphoned off over Rs 31,000 crore of public money through loans and advances to shell companies and other means to create private wealth for themselves.

Following the report by the CA firm, the stock price of the housing finance company surged over 20 per cent on the NSE, during the early trade on Wednesday.

It closed over 11 per cent up.

"The Company has not promoted any of the alleged 26 'shell' companies that are borrowers," said the independent chartered accounting firm, T.P. 0stwal & Associates LLP.

The firm was looking into the allegation made against DHFL by Cobrapost and examined the transactions of DHFL with 26 entities for loans aggregating to Rs 11,522 crore.

It was appointed in consultation with the Audit Committee to verify the allegations made against the company by Cobrapost.

However, the accounting firm found certain instances of deviations and non-adherence to the terms of sanction of loans having major risk implications, especially in relation to post-sanction monitoring of fund use by borrowers.

Also, certain lapses and departures from the standard operating procedure and policies laid by the company were identified. These lapses, the report said, point to deficiency in the adherence with the policies in several instances.

--IANS

ravi/mr