MUMBAI: The Directorate of Enforcement (ED) provisionally seized assets worth Rs 578 crore (Rs 57 million) from Wadhawan Global Capital UK Ltd (WGCL) in a fraud case involving Dewan Housing Finance Corporation Ltd (DHFL).
The attached assets are in the form of investments via WGC in UK companies. This is the first provisional seizure in a money laundering case in which DHFL used funds from UP Power Corporation Ltd (UPPCL).
The defendants, DHFL promoters Kapil Wadhawan and his brother Deeraj Wadhawan, are already in custody in another money laundering case linked to Yes Bank.
The state-owned UPPCL reportedly invested Rs 4,123 crore from its employees’ contingency fund into DHFL as a fixed deposit without obtaining the required approval. The DHFL has yet to reimburse Rs 2,268 crore of the principal. The ED investigation revealed that the Wadhawan brothers embezzled Rs 1,000 crore of UPPCL money in the UK after distributing it to more than 30 Indian companies they controlled. The money trail led ED to WGCL.
DHFL was disbursing high value loans to other companies linked to its promoters at the time it received the UPPCL investment. DHFL sanctioned the unsecured loans made to these companies under the leadership of its then president, Kapil Wadhawan, and most of the loans turned into non-performing assets.
DHFL had a joint account in which it would receive the UPPCL investment. In the same account, they received money from other sources, including loans and investments. The brothers would siphon money from this account by showing it as a loan to other companies in the group. During the investigation, the ED discovered that approximately Rs.450 crore reached DHFL joint accounts and was diverted to Wadhawan Global Capital (India) Ltd. From there, the money was further diverted to the WGCL account as an investment.
The ED case is based on an FIR from the UP Police, which appoints Pravin Gupta, then secretary of the UP Power Sector Employees’ Trust, and Sudhanshu Dwivedi, then director of finance of the UPPCL. Later, the investigation was transferred to the CBI.
The attached assets are in the form of investments via WGC in UK companies. This is the first provisional seizure in a money laundering case in which DHFL used funds from UP Power Corporation Ltd (UPPCL).
The defendants, DHFL promoters Kapil Wadhawan and his brother Deeraj Wadhawan, are already in custody in another money laundering case linked to Yes Bank.
The state-owned UPPCL reportedly invested Rs 4,123 crore from its employees’ contingency fund into DHFL as a fixed deposit without obtaining the required approval. The DHFL has yet to reimburse Rs 2,268 crore of the principal. The ED investigation revealed that the Wadhawan brothers embezzled Rs 1,000 crore of UPPCL money in the UK after distributing it to more than 30 Indian companies they controlled. The money trail led ED to WGCL.
DHFL was disbursing high value loans to other companies linked to its promoters at the time it received the UPPCL investment. DHFL sanctioned the unsecured loans made to these companies under the leadership of its then president, Kapil Wadhawan, and most of the loans turned into non-performing assets.
DHFL had a joint account in which it would receive the UPPCL investment. In the same account, they received money from other sources, including loans and investments. The brothers would siphon money from this account by showing it as a loan to other companies in the group. During the investigation, the ED discovered that approximately Rs.450 crore reached DHFL joint accounts and was diverted to Wadhawan Global Capital (India) Ltd. From there, the money was further diverted to the WGCL account as an investment.
The ED case is based on an FIR from the UP Police, which appoints Pravin Gupta, then secretary of the UP Power Sector Employees’ Trust, and Sudhanshu Dwivedi, then director of finance of the UPPCL. Later, the investigation was transferred to the CBI.
