Sebi bars DHFL promoters from securities market

Mumbai: The Securities and Exchange Board of India (Sebi) has barred promoters of Dewan Housing Finance Ltd (DHFL) from accessing the securities market for allegedly indulging in fraudulent transactions and defrauding investors by publishing false financial statements.

The regulator has restrained Kapil Wadhawan, his relatives Dheeraj Wadhawan, Rakesh Kumar Wadhawan, Sarang Wadhawan, Aruna Wadhawan, Malti Wadhawan, Anu S Wadhawan, Pooja Wadhawan, and four Wadhawan Group companies from dealing in in any kind of securities until further orders.

Sebi has also restrained these individuals and entities from associating themselves with any listed company as directors which intends to raise money from the public or any intermediary registered.

“Kapil Wadhawan and Rakesh Wadhawan, being the Chairman and Managing Director of the Company for the past several years, were responsible for ensuring the integrity of DHFL’s accounting and financial reporting systems and based on the findings of the Initial Report, it appears that they were, prima facie, involved in the manipulation/ falsification in books of accounts and, thereby, misrepresented to the investors and other stakeholders the financial information pertaining to the Company,” Sebi's whole time member G Mahalingam said, in his interim ex- parte order.

The regulator said the initial report raises serious concerns over authenticity and reliability of DHFL’s financial statements for the period FY 2007 to FY 2019.

During this period the company had raised a significant amount of Rs. 24,000 crores through public issue of debt securities, it said.

“The investors in debt securities issued by the Company and investors who dealt with the Company’s equity shares during this period were induced into these transactions based on the untrue information disseminated by the Company. The interest of investors who take the decision of investing in the securities of the Company on the basis of financial position of the Company and disclosures made in the financial statements have been, prima facie, affected adversely due to the aforesaid transactions entered into by the Company and the consequent fraudulent misstatements in the financial statements of the Company,” Sebi said.