DHFL’s promoters formed 87 shell companies, created more than 260,000 fictitious borrowers, set up a ‘virtual branch’ in order to divert the money it had borrowed from the banks, according to the Central Bureau of Investigation (CBI). The agency in its charge sheet filed last month also said that Kapil and Dheeraj Wadhawan bought 24 paintings worth Rs 63 crore from the diverted funds.
The charge sheet stated that DHFL disbursed Rs 11,675 crore to these 87 shell companies between 2007 and 2017, and entities were incorporated in the name of Wadhawan’s employees, associates and friends, according to a report in The Economic Times.
A special CBI court, taking cognisance of the charge sheet, summoned all the 75 accused. It also said that an overseas level investigation was required to ensure the trail of the funds to DHFL, as per the report.
The CBI charge sheet stated that DHFL used these entities fraudulently as vehicles to divert the funds they received from the banks to their entities. DHFL has many branches for loan disbursement but for loans disbursed to the shell companies, they created a specific code in the name of ‘Bandra branch’.
Most of these Bandra book companies did not have any projects to avail loans from DHFL. No formal procedure of loan assessment or appraisal was followed in the approval of these loans. These loans were approved by Kapil Wadhawan.
The ‘Bandra branch’ with code 001 was created in the software system. Trial balance of the old software system was manually fed against this branch for reconciliation of the bank’s balance. The Bandra branch did not exist physically and was created virtually and was part of the criminal conspiracy hatched by the promoters to siphon off funds from banks, the CBI said.
CBI stated that the company created 260,000 dummy borrowers, using a software that produces dummy data using names and addresses it picks up randomly of already existing DHFL borrowers.
The Wadhawans also diverted funds for personal expenses including foreign trips, renting chartered flights, and credit card charges.
Also read: Yes Bank-DHFL case: ED attaches Rs 415 cr assets of Avinash Bhosale, Sanjay Chhabria
