DHFL failed to comply with norms for sanctioning loans: Report
Mortgage lender Dewan Housing Finance (DHFL) did not create shell companies to divert fund but failed to comply with norms for sanctioning of loans, a report by an independent chartered account firm said. In January this year, online news portal Cobrapost had alleged that its promoters have syphoned off over Rs 31,000 crore of public funds.
Following that the mortgage lender had appointed chartered accountant firm TP Ostwal & Associates LLP to look at allegations by Cobrapost. The audit report showed that there are no indications to confirm the allegations that DHFL created shell companies to divert funds.
It said there was no evidence to support the allegations that the DHFL's promoters concealed shareholding in the company and instances of insider trading. It, however, said, "There are certain instances of deviations and non-adherence to the terms of sanction of loans having major risk implications, especially in relation to post-sanction monitoring of fund use by borrowers." The non-compliances with the terms of the borrowing and possible diversion of funds, if any, by the borrowers would have escaped the attention of the company, the report showed.
It said though the company is required to monitor post disbursal end use of funds by the borrowers, the monitoring in respect of 15 borrowers, with loans amounting to Rs 7,485 crore, was significantly inadequate. The findings showed there was no evidence of political considerations in connection with certain lending.
(With inputs from agencies.)