The uncertain crisis as a DHFL survival is sharp
The mortgage crisis in Deewan Housing and Finance Company Limited (DHFL) has worsened due to two reasons. First of all, the company’s legal auditors sought additional information for meeting their annual results for the fiscal year 2018-19, thereby increasing the suspicion that the company is already under official scrutiny of allegations of fraudulent activities .
Second, to recover the liquidity crisis, the company will require a new equity investment of around Rs 3,000 crore, which is a potential task for its existence.
Shares of DHF on Monday fell by 29% on the Bombay Stock Exchange, in the Bose File on the Bombay Stock Exchange Saturday, that many recent developments “can cause serious doubts about the continuation of the company’s capacity.
” DHFL President and General Manager said on Monday that he expects the company to “resume operations in August 2019”.
But the mortgage bank is struggling to find a strategic investor or equity investor to support its capital base for some time. Unless the bank can deposit sufficient funds, they will not be ready for a loan or recession or will not spoil their business.
According to a report by Mint, in order to maintain the lending operation, the company needs Rs. 2500 crore to Rs. 3 crore for new investments.
Wadhawan claims that the company is out of the crisis due to the perception that it “managed to repay more than Rs 41,800 crore in the last 10 months through securitization of property and repayment groups”.
But this lenders do not have to explain them. DHFL has already made an agreement between creditors and lenders and is going to announce the solution till July 25.
According to media reports, microfinance institutions (lenders) are now considering breaking the rank with the banks and going to the debt collection court. (DRT) cases.
According to the company’s undeclared financial results for the fourth quarter ending March 2019, the company recorded a net loss of Rs.2223 crore in the fourth quarter and a net loss of Rs.1,036 crore for the previous financial year.
The company has outstanding debt of Rs 89,387 crore at the end of March 2019. Thus, the share of banks is Rs 40,000 crore, and the rest are due to many investment funds, savings funds and individual investors.
On 6th June, the legal auditors of Deloitte Haskins and Sales and Chaturvedi and Shah, DHFL sought additional financial information from the company to compile its annual results for fiscal year 2018-19, including Section 143 of the Companies Act, 2013 That includes rules also.
And for the auditor to report suspicious fraud or fraud to the system. DHFL is providing necessary information till July 21.
Apart from this, the revival of the housing finance company is uncertain, given the development, it has delivered it to the brink of collapse.
When the infrastructure and financial services disaster (IL & FS) broke, DHFL was the toughest hit with fund houses, especially investment funds, tightening the rules for refinancing.
In January this year, the Cobrapost News Portal claimed that DHFL had “stolen Rs 31,000 crore from public funds” using loans and advances to Shell companies and other means.
” This has prompted the Serious Fraud Investigation Office to consider the allegation in which the investigation is going on.
While DHFL management denied all allegations of “shell companies” and appointed an accounting firm TP Ostwal and Associates LLP to look into the allegations.
Although the company denied the claims of Kublib, it indicates that there were some discrepancies in the DHFL books.
For example, although DHFL has been accused by the borrower of monitoring the end use of the money, but the accounting firm found that the control of the company in relation to 15 borrowers (loans of Rs 78585 crore) is largely inadequate.
But recent demand by the auditors has only increased the crisis of DHFL.