ED Freezes ₹51.75 Crore In DHFL Loan Fraud Probe

The Enforcement Directorate (ED) has frozen ₹51.75 crore in an Indian bank account of Dubai-based M/s Al Jalore Trading FZE, alleging that the funds are proceeds of crime generated through the diversion of loans sanctioned to Dewan Housing Finance Corporation Ltd (DHFL).

The action was taken after searches were conducted on August 19 by the ED's Headquarters Investigation Unit under the Prevention of Money Laundering Act (PMLA) in connection with the alleged ₹34,615-crore loan fraud involving DHFL promoters Kapil Wadhawan and Dheeraj Wadhawan.

The ED's investigation stems from a CBI FIR registered on the complaint of Union Bank of India on behalf of a consortium of 17 banks. According to the FIR, the accused persons, including Kapil Wadhawan and Dheeraj Wadhawan, entered into a criminal conspiracy to cheat the consortium banks, which had sanctioned credit facilities aggregating to ₹42,871.42 crore to DHFL.

The loan funds were allegedly siphoned off through falsification of DHFL's books, causing an estimated wrongful loss of ₹34,615 crore to the lenders. The ED has seized or impounded documents and records relating to the transactions and assets under investigation.

The ED's investigation has traced part of the alleged proceeds of crime to Hurtmore House, a property in the United Kingdom held in the name of Vanita Wadhawan, wife of Kapil Wadhawan. The agency alleged that a fictitious liability was created in Vanita Wadhawan's name through a purported loan agreement between her and Al Jalore Trading FZE, against which the UK property was mortgaged.

The arrangement, the ED said, was used to create an encumbrance over the foreign asset to facilitate settlement of a liability in India arising from the alleged DHFL loan fraud. The property was subsequently sold in 2026, with the sale proceeds directed to the Indian bank account of M/s Al Jalore Trading FZE instead of the registered owner, Vanita Wadhawan, the ED alleged.

The transaction involved the disposal and utilisation of the foreign asset through a structured arrangement involving foreign property and entities, with the proceeds allegedly used to facilitate settlement of the Indian liability.

The ED's action is a significant development in the probe into the DHFL loan fraud, which has been ongoing for several years. The agency's investigation has uncovered a complex web of transactions and assets, both in India and abroad, which were allegedly used to siphon off funds and launder money.

The case highlights the need for greater scrutiny and oversight of financial transactions, particularly those involving large sums of money and complex international transactions. It also underscores the importance of cooperation between law enforcement agencies and financial institutions in preventing and detecting financial crimes.

The ED's probe into the DHFL loan fraud is likely to have significant implications for the financial sector and the economy as a whole. The agency's actions are aimed at recovering the proceeds of crime and bringing those responsible to justice.

In conclusion, the ED's freezing of ₹51.75 crore in the DHFL loan fraud probe is a major development in the investigation. The agency's actions demonstrate its commitment to combating financial crimes and recovering the proceeds of crime. The case is a reminder of the need for vigilance and cooperation in preventing and detecting financial crimes, and the importance of holding those responsible accountable for their actions.