ED freezes ₹51 crore in DHFL loan ‘fraud’ case

The Enforcement Directorate (ED) has frozen ₹51.75 crore lying in a bank account, following searches in connection with a bank loan fraud case allegedly involving Dewan Housing Finance Corporation Limited (DHFL) and its promoters.

The ED probe under the Prevention of Money Laundering Act (PMLA) is based on a First Information Report (FIR) registered by the Central Bureau of Investigation (CBI) pursuant to a complaint lodged by the Union Bank of India on behalf of a consortium of 17 banks.

The FIR mentions that the accused persons, including Kapil Wadhawan and Dheeraj Wadhawan, entered into a criminal conspiracy to cheat the consortium banks, which had sanctioned credit facilities totalling ₹42,871.42 crore to DHFL.

“The loan funds were siphoned off and misappropriated through falsification of the books of accounts of DHFL, resulting in a wrongful loss of approximately ₹34,615 crore to the consortium lenders,” the ED said.

Foreign asset

According to the ED, a foreign asset, named Hurtmore House in the United Kingdom, earlier held in the name of Kapil Wadhawan’s wife, Vanita Wadhawan, was disposed of through a series of transactions involving the creation of a fictitious liability in her name.

“A purported loan agreement was executed between Al Jalore Trading FZE and Vanita Wadhawan, and the said U.K. property was mortgaged pursuant thereto. Investigation has revealed that the arrangement was used to create an encumbrance over the foreign asset for the purpose of settling a liability in India arising out of the DHFL loan fraud,” it alleged.

The U.K. property was subsequently sold earlier this year, and the sale consideration was directed to the bank account of Al Jalore Trading FZE maintained in India, instead of being received by the registered owner, Vanita Wadhawan, said the agency.

It further alleged that the transaction, therefore, involved dissipation of proceeds of crime, use and disposal of a foreign asset in a manner intended to facilitate settlement of an Indian liability through a structured transaction involving foreign property and entities.

During the searches, the bank account of Al Jalore Trading FZE was examined, and an amount of $5.41 million (equivalent to about Rs. 51.75 crore) was frozen. “Other incriminating documents and records relating to the transactions and assets under investigation were also seized/impounded…,” said the agency.