Dheeraj Wadhawan, the former director of Dewan Housing Finance Limited (DHFL), was sent to judicial custody on Tuesday after appearing before a special court in Delhi. The Central Bureau of Investigation (CBI) apprehended the former promoter in connection with a Rs 34,000 crore bank fraud case. Wadhawan was arrested in Mumbai on Monday night and presented before a special court in the area, where he was remanded to judicial custody on Tuesday, according to an official. Earlier, both Wadhawan brothers, Dheeraj and Kapil, were arrested in connection with the case on July 19, 2022.
Furthermore, on October 15, 2022, the agency filed a charge sheet against 75 entities, including Kapil and Dheeraj. The special court awarded them "statutory" bail on December 3, 2022, citing incomplete investigation and piecemeal filing of the charge sheet. This decision was also upheld by the Delhi High Court.
The CBI appealed the decision to the Supreme Court, which revoked the bail orders, stating that both the Special Court and the High Court had "made a serious error of law" by ignoring the legal position established and confirmed by the apex court.
Meanwhile, the Bombay High Court granted Dheeraj Wadhawan interim bail in a distinct medical case due to his admission at Lilavati Hospital for treatment. The Bombay High Court officially approved the bail in that matter on May 2 this year and also prolonged his safeguard from CBI arrest for one week.
The officials said that after the protection period expired, the CBI arrested Wadhawan. Presently, the three accused—Dheeraj Wadhawan, his brother Kapil Wadhawan, and Ajay Nawandar—are in judicial custody. The CBI initiated action against the Wadhawans and others based on a complaint from the Union Bank of India, which led the 17-member lender consortium that provided credit facilities to DHFL amounting to Rs 42,871 crore between 2010 and 2018.
DHFL Case:
According to the charge sheet filed by the agency, Kapil and Dheeraj Wadhawan, along with others, are accused of engaging in a criminal conspiracy, misrepresenting and concealing facts, committing a criminal breach of trust, and misusing public funds. This allegedly resulted in defrauding the consortium of Rs 34,615 crore by defaulting on loan repayments from May 2019 onwards.
The CBI has accused the company of engaging in financial irregularities, fund diversions, falsifying records, and engaging in circular transactions to "generate assets for Kapil and Dheeraj Wadhawan" using public funds. According to officials, DHFL loan accounts were categorised as non-performing assets by various lender banks at different intervals.
Following media reports on allegations of fund diversion in January 2019, DHFL came under investigation. After that on February 1, 2019, lender banks convened a meeting and appointed KPMG to conduct a "special review audit" of DHFL from April 1, 2015, to December 31, 2018.
The audit findings revealed the diversion of funds disguised as loans and advances to related entities and individuals connected to DHFL and its directors. The scrutiny of account records revealed that 66 entities associated with DHFL promoters were disbursed Rs 29,100 crore, with Rs 29,849 crore outstanding, as alleged by the CBI.
According to the allegations, the majority of these transactions involved investments in land and properties.