Photo: Pradeep Gaur/Mint
Photo: Pradeep Gaur/Mint

DHFL board seeks detailed response from the company on KPMG forensic audit

  • Board also directs DHFL to share the responses with the lenders
  • Findings of the forensic audit can potentially scupper a proposed debt restructuring plan aimed at reviving DHFL

MUMBAI : Dewan Housing Finance Corp Ltd (DHFL) on Wednesday said that its board has asked it to review the key observations from a draft audit report prepared by KPMG and respond in detail to the audit committee.

The board also directed the company to share the responses with the lenders, it said.

"Please note that the Board of Directors of the Company at its meeting held today i.e. on 23 October, 2019, which commenced at 2.30 p.m. and concluded at 6.55 pm took cognizance of the key observations from the draft report prepared by KPMG, who were appointed by Union Bank of India, the lead banker of the consortium, on behalf all the members of the consortium as received from the lenders," DHFL said in a regulatory filing.

Mint reported on Wednesday that about 25 group companies to which Dewan Housing Finance Ltd had lent a total of 14,000 crore had an average profit of about 1 lakh, a forensic audit of the company has found, raising suspicion that the mortgage lender may have diverted funds.

Out of the around 27,000 crore worth of loans raised by DHFL from banks for on-lending to home buyers, around 10,050 crore was invested in mutual funds, the findings of the audit revealed.

The draft report of the audit was shared with the members of DHFL’s committee of creditors (CoC) last week. Mint has reviewed parts of the 90-page report prepared by accounting firm KPMG.

The findings of the forensic audit, initiated by the lenders of the debt-laden home financier, can potentially scupper a proposed debt restructuring plan aimed at reviving DHFL. It may also prompt lenders to the company to push for a change in the management of the Wadhawan family-run company.


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