The Central Bureau of Investigation (CBI) has apprehended former DHFL Director Dheeraj Wadhawan over his purported involvement in a scheme to defraud a consortium of 17 lending banks amounting to Rs 340 billion, according to officials on May 16. Wadhawan was taken into custody from Mumbai during the night of May 13 and subsequently presented before a special court, which remanded him into judicial custody. He and his brother Kapil were previously detained in connection with the case on July 19, 2022.

The agency had submitted a charge sheet against 75 entities, including Kapil and Dheeraj, on October 15, 2022. They were granted statutory bail by the special court on December 3, 2022, citing incomplete investigations and a piecemeal charge sheet. This decision was upheld by the Delhi High Court. However, the Supreme Court overturned the bail orders, criticizing both the Special Court and the High Court for disregarding established legal principles.

Meanwhile, Dheeraj Wadhawan was granted interim bail on medical grounds by the Bombay High Court due to his hospitalization at Lilavati Hospital. The bail was made permanent on May 2 this year, along with an extension of protection from CBI arrest for one week. Subsequently, the CBI arrested Wadhawan after the expiration of this protection period.

Currently, three accused individuals — Dheeraj Wadhawan, Kapil Wadhawan, and Ajay Nawandar — are in judicial custody. The CBI initiated the investigation following a complaint from the Union Bank of India, the lead bank in the consortium that provided credit facilities amounting to Rs 428.71 billion to DHFL between 2010 and 2018.

The agency alleges that Kapil and Dheeraj Wadhawan, along with others, engaged in a criminal conspiracy to misrepresent facts, commit criminal breach of trust, and misuse public funds to defraud the consortium of Rs 346.15 billion by defaulting on loan repayments since May 2019. The CBI further alleges financial irregularities, fund diversions, book fabrications, and round-tripping of funds to benefit the Wadhawan brothers using public money. DHFL's loan accounts were classified as non-performing assets by the lending banks at various intervals.

When DHFL came under scrutiny in January 2019 due to media reports alleging fund misappropriation, the lending banks convened a meeting on February 1, 2019, and appointed KPMG to conduct a special review audit of DHFL from April 1, 2015, to December 31, 2018. The audit revealed fund diversions disguised as loans and advances to related entities and individuals associated with DHFL and its directors. According to the CBI, scrutiny of account books showed that 66 entities linked to DHFL promoters were disbursed Rs 291 billion, with Rs 298.49 billion outstanding, mainly invested in land and properties.

(Source: ET realty)