Last week, the Securities and Exchange Board of India (SEBI) lifted the securities market ban that had been imposed on eight former promoter entities of Dewan Housing Finance Ltd (DHFL). The ban had been imposed in relation to a case concerning alleged fraudulent financial transactions. The regulator also announced that its investigation into the matter had been completed and quasi-judicial proceedings had been initiated against four other former promoters of DHFL: Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan and Sarang Wadhawan (now known as Piramal Finance).
Last week, the Securities and Exchange Board of India (SEBI) lifted the securities market ban that had been imposed on eight former promoter entities of Dewan Housing Finance Ltd (DHFL). The ban had been imposed in relation to a case concerning alleged fraudulent financial transactions. The regulator also announced that its investigation into the matter had been completed and quasi-judicial proceedings had been initiated against four other former promoters of DHFL: Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan and Sarang Wadhawan (now known as Piramal Finance).
The eight former promoter entities are collectively referred to as noticees and include Aruna Wadhawan, Malti Wadhawan, Anu Wadhawan, Pooja Wadhawan, Wadhawan Holdings Pvt Ltd, Wadhawan Consolidated Holdings Pvt Ltd, Wadhawan Retail Venture Pvt Ltd and Wadhawan Global Capital Ltd (formerly known as Wadhawan Housing Pvt Ltd).
In a fresh order, SEBI's Whole Time Member Ashwani Bhatia noted that the investigation in the matter had been completed, and quasi-judicial proceedings were being initiated against four former promoters of DHFL. However, Bhatia also noted that the investigation did not decisively establish the role of the other noticees. Therefore, Bhatia directed that the restraint imposed on the noticees, as per the interim order and confirmatory order, should stand vacated with immediate effect.
In September 2020, SEBI had passed an interim order restraining Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan, Sarang Wadhawan and the other noticees from the securities markets. The regulator had also barred them from associating themselves as directors or promoters of any listed public company or with any intermediary registered regulator.
This order had been passed after a transaction auditor had raised serious concerns about the authenticity and reliability of DHFL's financial statements from 2007 to 2019. During this period, the firm had raised Rs 24,000 crore through a public issue of debt securities.
SEBI had noted that DHFL entered into certain fraudulent transactions that were shown as bonafide transactions in its published financial statements as well as corporate announcements disseminated in the public domain. In October 2021, SEBI confirmed the directions passed against twelve promoters of DHFL, including Kapil, Dheeraj, Rakesh Kumar, Sarang and the other noticee, which barred them from accessing securities markets.
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