sebi:WTM/AN/CFID/CFID/31591/2025-26

SEBI · SEBI · 2019-11-20 · Ananth Narayan G., Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Provisions invoked

• s. 11
• s. 19
• s. 11(1)
• s. 12A
• s. 11(2)
• s. 15H
• s. 27
• s. 15J
• s. 11C(2)
• s. 21
• s. 138
• s. 23H
• s. 65B
• s. 31
• s. 2(76)
• s. 227
• s. 66
• s. 149
• s. 32A
• s. 45I

Regulations

• Reg. 11
• Reg. 3
• Reg. 4
• Reg. 4(1)
• Reg. 4(2)
• Reg. 3(b)
• Reg. 4(1)(a)
• Reg. 2(1)(b)
• Reg. 23(2)
• Reg. 17(8)
• Reg. 4(2)(f)(i)
• Reg. 33(2)(a)
• Reg. 2

Parties

• Mr. Kapil Wadhawan (Noticee 1)
• Mr. Dheeraj Wadhawan (Noticee 2)
• Mr. Rakesh Wadhawan (Noticee 3)
• Mr. Sarang Wadhawan (Noticee 4)
• Mr. Harshil Mehta (Noticee 5)
• Mr. Santosh Sharma (Noticee 6)

Holding

The order addresses preliminary objections (delay in SCN, incomplete email dump, non-joinder of parties, cross-examination opportunities) and merits issues regarding siphoning of funds by DHFL to promoter-connected Bandra Book Entities and misrepresentation of financial statements. The dispositive portion (penalty, final findings) is not included in the provided excerpt.

Full text

Order in the matter of Dewan Housing Finance Corporation Ltd. (DHFL) Page 2 of 181 Issue III: Whether the email dump provided to Noticee 6 by SEBI is incomplete? 39 Issue IV: Whether the present proceedings suffer from non-joinder of necessary parties as alleged by Noticee 5? ............................................................................ 40 Issue V: Whether Noticee 2 / his ARs were afforded sufficient opportunities to cross- examine individuals? .............................................................................................. 42 Issue VI: Whether SEBI ought to have permitted Noticee 6 to conduct cross- examination of Mr. Pankaj Rana? .......................................................................... 46 PART II: ISSUES ON MERITS .................................................................................. 46 Issue I: Whether DHFL had siphoned off funds to Promoter related and/ or connected entities and misrepresented its financial statements? .......................... 46 What was the “Bandra Branch” and What are “Bandra Book Entities (BBEs)” .............................................................................................................. 46 Whether BBE’s were connected to the Promoters of DHFL ......................... 48 Whether some BBEs were controlled by Promoters ..................................... 57 Whether BBEs were issued disproportionately high value loans despite weak financials ................................

Order in the matter of Dewan Housing Finance Corporation Ltd. (DHFL) Page 3 of 181 A. BACKGROUND 1. Dewan Housing Finance Corporation Limited (“DHFL”/ “Company”), a housing finance company was carrying on the business, inter alia, of providing loans to retail customers for construction or purchase of residential property, and loans against property. On November 20, 2019, the Reserve Bank of India (“RBI”) vide its order no. DOR NBFC(PD) 986/03.10.136/2019-20 issued under section 45IE(1) of the Reserve Bank of India Act, 1934 (“RBI Act”) superseded the board of directors of DHFL. Thereafter, on November 29, 2019, RBI filed an application to initiate the corporate insolvency resolution process (“CIRP”) with respect to DHFL under section 227 of the Insolvency and Bankruptcy Code, 2016 (“IBC”). Grant Thornton India LLP (“Transaction Auditor”/ “GT”) was appointed by the Resolution Professional (“RP”) to assist him in conducting a transaction audit of the Company.

Order in the matter of Dewan Housing Finance Corporation Ltd. (DHFL) Page 4 of 181 known as Wadhawan Housing Pvt Ltd) were restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities in any manner whatsoever; and

Source: SecMarx — sebi:WTM/AN/CFID/CFID/31591/2025-26. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.