DHFL diverted Rs 12,700 cr into 79 shadowy firms linked to promoters: ED

In its books, these loans sanctioned to 100,000 fictitious retail customers.

Dewan Housing Finance (DHFL) diverted Rs 12,773 crore of loans to 79 shadowy companies allegedly associated with its promoters in the garb of retail loans to about 100,000 fictitious customers between 2010 and 2015, according to the Enforcement Directorate (ED).

The ED, which is probing the DHFL promoters' role in financing funds to gangster Iqbal Memon (alias Iqbal Mirchi), said Kapil Wadhawan, former chairman and managing director of the debt-laden company, played a very crucial role in these “nefarious transactions” by way of money laundering.

Wadhawan was arrested by the agency earlier this week in connection with the money-laundering case linked with properties involving Mirchi. He was remanded in ED custody till Friday.

“This appears to be a scam of wider ramifications wherein the preliminary investigation conducted indicates that more than Rs 12,700 crore have been diverted illegally, and the ‘orchestrator and prime conspirator’ for the scam was Kapil Wadhawan,” the ED said in its enquiry report. The agency said the search operation was underway to unearth further incriminating documents and records, and that it was suspected that the quantum of scam might increase.

Books of accounts of DHFL showed that Rs 2,186 crore loans (of the Rs 12,773 crore) were given to five companies — Faith Realtors, Marvel Township, Able Realty, Poseidon Realty, and Randon Realtors, which later got amalgamated with Sunblink Real Estate, a company which has been under the ED lens for its transactions with Mirchi properties.

Kapil Wadhawan first diverted huge funds from DHFL to the five shell companies and later amalgamated them with Sunblink to cover the alleged diversion of loans acquired from DHFL, the ED said. These five entities and Sunblink are inter-related and have been used and controlled by Kapil Wadhawan to layer and obfuscate the origin on monies, it noted.

These loans were disbursed and diverted in five to six years (2010-2016), when in 2010, Kapil’s brother and DHFL promoter Dheeraj Wadhawan bought three properties in Worli, Mumbai, from Mirchi in the name of Sunblink. This deal was allegedly finalised for surrender of tenancy rights in favour of Sunblink for Rs 225 crore. The source of the amount paid in India towards the deal, Rs 111 crore, was arranged by DHFL and RKW Developers.

ED arrests DHFL's Kapil Wadhawan in Iqbal Mirchi money laundering case

At present, DHFL is undergoing proceedings under the insolvency law.

The Enforcement Directorate (ED) formally arrested Kapil Wadhawan (pictured), former chairman and managing director of debt-laden Dewan Housing Finance (DHFL), for his alleged role in financing a loan to gangster Iqbal Memon (alias Iqbal Mirchi), supposedly also used for funding terrorism.

Wadhawan was produced in court under the Prevention of Money Laundering Act and remanded to the ED's custody for two days.

Sources in the ED alleged he approved all payments to Mirchi. “He was looking after the finances at that point of time (in 2010) and had played a vital role in structuring the whole deal with Memon,” said an official.

ED is investigating a money laundering case against Memon, linking his several property deals in Mumbai — these are being treated as proceeds of crime. Three of these properties were reportedly sold to Sunblink Developers, a company connected with Kapil’s brother, Dheeraj Wadhawan.

An ED chargesheet filed last month in court had a series of details in this regard, naming the Wadhawans. The duo was said to have used DHFL to pay Memon, in the form of loans.

At present, DHFL is undergoing proceedings under the insolvency law.

The ED says after various meetings, Dheeraj Wadhawan entered into an agreement in March 2010 with Memon, where he agreed to acquire the development rights of the properties mentioned earlier. This was to be done through Sunblink, where Dheeraj's brother-in-law, Sunny Bhatija, was a director.

A deal was allegedly finalised for surrender of tenancy rights in favour of Sunblink for Rs 225 crore. The source of the amount paid in India towards the deal, Rs 111 crore, was arranged by DHFL and RKW Developers. An earlier loan was taken from DHFL in 2010, repaid by the loan taken from RKW at an annual interest rate of five to six per cent, went the chargesheet.