DHFL used bizman Sudhakar Shetty as conduit to siphon off Rs 3,000 crore

The brothers, who are being probed separately by the Serious Fraud Investigation Office and the Enforcement Directorate (ED), had used several conduits to float a maze of shell companies though which the money was channelled out.

MUMBAI: Dewan Housing Finance Corp (DHFL) promoters Kapil and Dheeraj Wadhawan had used businessman Sudhakar Shetty as a conduit to siphon off at least Rs 3,000 crore of the Rs 12,000 crore they had allegedly moved out of the mortgage lender, people privy to the probe into the matter said.

The brothers, who are being probed separately by the Serious Fraud Investigation Office and the Enforcement Directorate (ED), had used several conduits to float a maze of shell companies though which the money was channelled out, they said. While DHFL, which is now undergoing insolvency proceedings, sanctioned loans to some of these shell companies, the others were allegedly used to route the funds raised as loans for laundering, evergreening of loans or siphoning off to acquire assets, they said.

The ED, which probes money-laundering cases, late last month raided the offices and residence of Shetty in connection with the probe.


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“Like in the case of Shetty, his company, Darshan Developers, acted as an intermediary. DHFL sanctioned loans to at least six shell companies floated by Shetty. These six companies then bought stakes in Darshan Developers. Erstwhile Wadhawan Realtors (now, Kyta Advisors Pvt Ltd) held a stake in Darshan Developers,” said an official privy to the probe details. “So, while Shetty was the director of Darshan Developers, the said firm was used as a front by the Wadhawans to route the loans which were availed of from their NBFC, DHFL,” he added.

The ED had summoned Shetty, but he had not turned up for questioning so far. Darshan Developers didn’t respond till press time Sunday to an email seeking comment. While Shetty wasn’t reachable for comment, the Wadhawans had earlier denied all allegations against them.

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Documents and other filings of these six companies seen by ET show that Notion Real Estate Pvt Ltd, Earleen Real Estate Developers Pvt Ltd, Prashul Real Estate Pvt Ltd, Edweena Real Estate Pvt Ltd, Wamika Real Estate Pvt Ltd and Prithvi Residency Pvt Ltd, to which DHFL sanctioned loans in fiscal 2016-17, had bought stakes in Darshan Developers the same financial year.

Notion Real Estate was sanctioned a Rs 360 crore loan on May 23, 2016 for a project under a Slum Redevelopment Authority (SRA) scheme in Mumbai. A plot in suburban Mumbai was mortgaged against this loan. Later in the same financial year, Notion Real Estate bought shares of Darshan Developers for Rs 344.59 crore, according to the documents.

On the same date, May 23, 2016, DHFL granted another loan of Rs 675 crores to Earleen Real Estate Developers, where too the mortgaged asset was the same plot located at Vile Parle. The only difference was in the area cited in the loan documents. For the Notion Real Estate loan, the plot size was shown as 9,444.52 sq metres, while for the second loan, it was given as 15,000 sq metres. In the same fiscal year, Earleen Real Estate Developers spent Rs 623.73 crore to buy a stake in Darshan Developers, show the documents.
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