Mirchi Case: Wadhawans quizzed by ED
The Enforcement Directorate questions Wadhawan brothers about loans amounting Rs 2,186-crore, extended to property firm Sunblink Real Estate that is allegedly involved with gangster Iqbal Memon alias Iqbal Mirchi. However, DHFL denies the allegat...
Mumbai: Kapil Wadhawan, chairman and MD of Dewan Housing Finance Corp. Ltd (DHFL), and his brother Dheeraj, who is a promoter of the company, were questioned over the weekend by the Enforcement Directorate (ED) over Rs 2,186-crore loans given by their non-banking financial company (NBFC) to a property firm under the scanner for alleged dealings with gangster Iqbal Memon alias Iqbal Mirchi.
Other than the loans by DHFL, the ED has questioned the two, specifically Dheeraj, on the transactions between Sunblink Real Estate — the property firm under scrutiny—and RKW Developers Pvt Ltd, said people with knowledge of the matter. Dheeraj Wadhawan has been a whole-time director of RKW Developers since 2007. Ranjeet Bindra, an agent, allegedly brokered the deal between Sunblink Real Estate and Mirchi.
Scrutiny of Loan Books
Bindra was its director between July 2011 and September 2012 and is now in ED custody.
Searches were conducted at eight locations in Mumbai including DHFL headquarters and RKW Developers’ office at HDIL Tower in suburban Mumbai, the people said.
“While Kapil, who was planning to visit Delhi, was picked up by an ED team and brought to the agency’s office in Ballard Pier on Saturday, where he was questioned till late night, Dheeraj has been admitted to a hospital owing to some lung infection and has been examined briefly,” said another person in the know.
“We suspect that the NBFC didn’t scrutinise the land parcels offered as security while sanctioning loans to Sunblink. Their loan books are being studied to ascertain if there was wilful negligence or is it a case of a wrong business decision,” said one of the persons.
“However, there are certain transactions that indicate an association with the director of the NBFC and that is being probed in detail.”
DHFL has maintained that it has never loaned money to Sunblink. Balance sheet, share subscription agreement and pledge letter documents seen by ET show certain transactions that purportedly involve Sunblink, RKW Developers and DHFL.
These show that in 2010 Sunblink took secured and unsecured loans totalling Rs 22.10 crore from DHFL. In the same year, it bought 9,500 fully paid equity shares of RKW Developers for Rs 95 lakh. One document pertaining to the list of allotment of equity shares of RKW Developers showed that Sunblink “allotted 9,500 shares” at Rs 1,000 each.
In 2010, Sunblink invested Rs. 9.35 crore in Juhu Investment and Rs 5.10 crore in Golden Beach Hotels & Resorts. While Juhu Investment is now known as Juhu Real Estate Developers, Golden Beach Hotels & Resorts is now known as Golden Beach Infracon. In both these companies, Dheeraj Wadhawan was a director earlier.
Another document, the share subscription agreement entered between RKW Developers and Sunblink in February 2019, is signed by Wadhawan and Placid Naronha, directors of RKW Developers, and Sunny Bathija and Mehul Bavishi, directors of Sunblink. Further, in August this year, RKW Developers pledged its shares with DHFL to secure a payment of Rs 1,013 crore sanctioned to Wadhawan Realty, of which Wadhawan and Naronha are former directors.
DHFL didn’t respond to emails. Dheeraj Wadhawan refused to answer queries and said he had been admitted to hospital.
“The duo is being probed on why loans given to Sunblink were invested in the company owned by Dheeraj and why in August RKW Developers pledged its shares with DHFL,” said one of the people cited above.
According to the agency’s case, Sunblink developed “proceeds of crime” involving three land parcels in Worli in south-central Mumbai belonging to Iqbal Memon, alias Iqbal Mirchi, and the deal between Sunblink’s “Dheeraj Deewan” and Mirchi was allegedly brokered by Bindra.
ED suspects that Bindra routed the money paid by Sunblink through hawala channels, shell companies and fake accounts into offshore accounts held by Mirchi. These funds are suspected to have been used by Mirchi for terror financing and creating personal assets, including a five-star hotel in Dubai.
On Saturday, ED told a special Prevention of Money Laundering Act (PMLA) court that it has recorded the statement of a partner with a legal firm who allegedly facilitated payments to Mirchi while seeking further custody of Bindra. “The witness provided details of the payment made by Sunblink to Mirchi to the accounts of the companies controlled by him through some companies/entities in Dubai,” said the remand application reviewed by ET.
The probe has also revealed that Mushraff Merchant, another associate of the Mirchi, opened accounts by submitting fake know-your-customer (KYC) details with certain Chennai branches of IDBI Bank. The funds deposited in these accounts was allegedly routed to Mirchi.
“During the course of the investigation, it was found that certain payments were made to Mirchi in respect of the said property through accounts opened in the dummy names of tenants by submitting fake KYC data in Chennai,” ED said in its remand application filed through counsel Hiten Venegaonkar. “The said bank has filed a complaint for criminal conspiracy and forgery under the Indian Penal Code against Merchant and the matter is being probed.”
Statement from the Promoter Family of DHFL
DHFL was formed in 1984 by a visionary leader Late Shri Rajesh Kumar Wadhawan keen on ensuring that IndiaEt is a nation of home owners. He observed that most Indians were unable to buy their dream home and committed himself to transforming the lives of Indian households by enabling access to home ownership through the inception of DHFL.
For over three decades now, DHFL has been providing easy access to affordable housing finance to help realise home-ownership aspirations of millions of lower and middle income families in semi-urban and rural India.
The recent NBFC crisis has impacted the business and operations of DHFL as well. We have nevertheless been working with the banks and institutions on a resolution plan with even our personal assets being offered to ensure a successful resolution. In the midst of this endeavor, the recent controversies are unfortunate.
The recent media articles with incorrect allegations and false statements despite the clarifications issued by DHFL setting out the correct position has left us as the promoter family of DHFL distraught and hurt. We have nevertheless cooperated fully with the investigating agency to its satisfaction and will continue to do so to establish our innocence. We reiterate that all our actions are in consonance with the highest standards of integrity and are lawful and legitimate and in the best interests of DHFL and all its stakeholders including its creditors who have supported DHFL’s growth over the years.
We reiterate that our actions over the last 12 months make clear our endeavour and intent. We will continue to work with the banks and institutions to ensure a smooth passage of the resolution plan which is imperative for the nation’s economy and to avoid any systemic issue.
We reiterate that any false and misleading representations, allegations or insinuations without any factual basis should not be paid heed to and ought to be avoided.