The Central Bureau of Investigation (CBI) has apprehended former DHFL Director Dheeraj Wadhawan for his alleged role in defrauding a 17-member bank consortium of Rs 34,000 crore. The arrest took place in Mumbai on Monday night, and Wadhawan was subsequently produced before a special court on Tuesday, which remanded him in judicial custody.
Dheeraj Wadhawan, along with his brother Kapil, had previously been arrested on July 19, 2022, in connection with the same case. The CBI had filed a charge sheet against 75 entities, including the Wadhawan brothers, on October 15, 2022. Despite being granted “statutory” bail on December 3, 2022, due to incomplete investigations and a piecemeal charge sheet, this order was later contested by the CBI. The Supreme Court overturned the bail, criticizing both the Special Court and the High Court for serious legal errors.
In a separate matter, Dheeraj Wadhawan was granted interim bail on medical grounds by the Bombay High Court, which was regularized on May 2. This bail included a temporary protection from CBI arrest, which expired last week, leading to his recent arrest.
Currently, Dheeraj Wadhawan, his brother Kapil Wadhawan, and associate Ajay Nawandar are in judicial custody. The CBI’s case stems from a complaint by the Union Bank of India, the lead bank in the consortium that extended Rs 42,871 crore in credit facilities to DHFL between 2010 and 2018. The Wadhawan brothers are accused of conspiring with others to misrepresent and conceal facts, commit a criminal breach of trust, and misuse public funds, leading to a default of Rs 34,615 crore from May 2019 onwards.
The CBI’s investigation revealed that the Wadhawans allegedly engaged in financial irregularities, fund diversion, book fabrication, and round-tripping of funds to create assets for themselves using public money. DHFL’s loan accounts were declared non-performing assets by various lender banks over time.
The initial investigation into DHFL began in January 2019 following media reports alleging fund siphoning. This prompted the lender banks to commission a special review audit by KPMG, covering the period from April 1, 2015, to December 31, 2018. The audit revealed significant fund diversions disguised as loans and advances to related entities and individuals connected to DHFL and its directors.
The CBI’s scrutiny of DHFL’s account books highlighted transactions with 66 entities that had links to DHFL promoters. These entities received Rs 29,100 crore, of which Rs 29,849 crore remained outstanding. The majority of these transactions were investments in land and properties.
The ongoing investigation underscores the complexity and scale of the alleged fraud, with significant implications for the banking sector and regulatory oversight. The case continues to unfold, with further legal proceedings expected as the CBI works to hold those responsible accountable and recover the defrauded funds.
