Sebi on Friday revoked the securities market ban imposed on eight former promoter entities of Dewan Housing Finance Ltd (DHFL) in a case pertaining to alleged fraudulent financial transactions.
Also, the regulator said the investigation in the matter had been completed and thereafter it initiated quasi-judicial proceedings against Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan and Sarang Wadhawan who were the other four former promoters of DHFL (now known as Piramal Finance).
The eight former promoter entities are -- Aruna Wadhawan, Malti Wadhawan, Anu Wadhawan, Pooja Wadhawan, Wadhawan Holdings Pvt Ltd, Wadhawan Consolidated Holdings Pvt Ltd, Wadhawan Retail Venture Pvt Ltd and Wadhawan Global Capital Ltd (formerly known as Wadhawan Housing Pvt Ltd).
The entities are collectively referred to as noticees.
In its fresh order, Sebi's Whole Time Member Ashwani Bhatia said, "I note that the investigation in the matter has now been completed, and quasi-judicial proceedings are being initiated against Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan and Sarang Wadhawan, amongst others. It is, however, noted that the investigation did not decisively establish the role of the other noticees".
"I, hereby direct that the restraint imposed on the noticees vide the interim order read with the confirmatory order, shall stand vacated with immediate effect," Bhatia added.
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In an interim order passed in September 2020, Sebi had restrained Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan, Sarang Wadhawan and the other noticees from the securities markets. It had also barred them from associating themselves as directors or promoters of any listed public company or associating with any intermediary registered with the regulator.
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 had raised Rs 24,000 crore through public issue of debt securities during this period.
Sebi had 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.
Subsequently, the regulator passed an confirmatory order in October 2021, confirmed the directions passed against twelve promoters of DHFL, including Kapil, Dheeraj, Rakesh Kumar, Sarang and the other noticee which barred them from accessing securities markets.
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