The Central Bureau of Investigation (CBI) has apprehended Dheeraj Wadhawan, the promoter of Dewan Housing Finance Ltd (DHFL), in connection with a staggering Rs35,000 crore fraud involving a consortium of 17 banks, led by Union Bank of India. Sources familiar with the case reported that Wadhawan, along with his brother Kapil, who is already incarcerated, is accused of misappropriating funds from banks. They allegedly sanctioned loans to companies they controlled without proper due diligence or adequate security, manipulating financial records in the process.
According to a senior CBI officer, Wadhawan was arrested on Monday in Mumbai and presented in a Delhi court the following day. The court has ordered his judicial custody until May 30.
Both Wadhawan brothers were initially arrested by the CBI on July 19, 2022. However, a trial court granted them bail on December 3, citing an incomplete charge sheet submitted by the CBI, which included 73 other accused individuals. The Delhi High Court upheld this decision in May 2023.
Earlier this year, the Supreme Court intervened, ordering the immediate arrest of the Wadhawan brothers, overriding the Delhi High Court’s previous ruling, as the CBI filed its charge sheet within the stipulated 90-day period.
Wadhawan’s legal representation sought interim bail for 12 weeks, pending the outcome of his final bail plea. Senior advocate Amit Desai, who represents him, declined to comment on the recent arrest.
As reported by HT on May 1, the CBI has filed a charge sheet naming several prominent individuals, including Alok Kumar Misra, former chairman and managing director of Bank of India and Oriental Bank of Commerce, among 33 others. The CBI claims Misra benefited from DHFL to the tune of Rs1.5 crore through a discounted flat for his son in Mumbai, in return for sanctioning loans during his tenure as head of BOI and OBC.
The allegations against DHFL span from January 2010 to December 2019, during which 17 banks reportedly extended credit facilities worth Rs42,871 crore to the company. It is alleged that the Wadhawans misappropriated these funds through shell companies, causing a loss of Rs34,926 crore to the banks involved.
The CBI classifies the DHFL case as one of the largest bank frauds in India, following the ABG Shipyard case. After DHFL’s ownership changed under India’s bankruptcy code, the CBI investigation found that 49 of the 131 companies named in the original FIR were legitimate borrowers without malicious intent. They identified genuine loan transactions worth Rs13,425 crore, with Rs5,836 crore already repaid.
The investigation revealed that DHFL provided approximately Rs11,765 crore in loans to around 87 shell companies, 81 of which belonged to the Wadhawan Group. These transactions were not reflected in the company’s financial records and were instead recorded as loans to 260,315 fictitious individuals, lacking proper documentation, security, or loan applications.