Corp Affairs Min starts inspection of HDIL

The corporate affairs ministry has started an inspection of the books of accounts of realty firm HDIL, which has been unable to meet its debt obligations for quite sometime, according to a senior official.

HDIL is embroiled in the crisis at Punjab and Maharashtra Cooperative (PMC) Bank, which has extended substantial amount of loans to the company.

Corporate Affairs Secretary Injeti Srinivas said an inspection of HDIL is being conducted by the ministry's field office.

"At this juncture, it is very clear that there is a huge exposure and that they (HDIL) are not able to repay their debts for quite sometime. There are serious issues on the face of it.

"They have not been able to generate revenues to meet their debt obligations. Those matters will have to be looked into. We have to see whether there is a business failure or some other issues," he said here on Tuesday.

Srinivas said that preliminary examination would be done by the ministry's field office and once they give their basic report then a view has to be taken whether there is need for a deeper probe or not.

"Inspection is quite deep. We go to the books of accounts also. We get a fair idea about how the financial management has been done. If you find some basic issues with internal financial controls or internal financial management... you will know whether there was anything malafide or not," he noted.

He was talking to reporters on the sidelines of an event organised by the Insolvency and Bankruptcy Board of India (IBBI).

On Monday, an official said a look out circular has been issued against two directors of HDIL after preliminary findings allegedly revealed financial irregularities at the company.

A look out circular is issued against a person directing the immigration authorities to ensure that he or she does not leave India through an airport or seaport.

The circular has been issued against the company's Managing Director Sarang Wadhawan and Whole Time Director Rakesh Kumar Wadhawan, the official had told PTI.

The move came after a request by the corporate affairs ministry which has been made operational by the Bureau of Immigration that comes under the Ministry of Home Affairs, the official added.

Incorporated in 1996, Mumbai-based HDIL mainly focused on real estate development in the Mumbai Metropolitan Region, which included clearing slum land and rehabilitating slum dwellers.