DHFL Ex-Chairman Kapil Wadhawan Gets Bail In Iqbal Mirchi Case
The signage for Dewan Housing Finance Corporation Ltd. is displayed atop a building in Mumbai, India. Photo: BloombergQuint

DHFL Ex-Chairman Kapil Wadhawan Gets Bail In Iqbal Mirchi Case

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A special court on Friday granted bail to Kapil Wadhawan, erstwhile chairman and managing director of Dewan Housing Finance Ltd., who was arrested in connection with a money laundering case also involving the late gangster Iqbal Mirchi.

The Enforcement Directorate moved Bombay High Court seeking a stay on the special court’s order but withdrew the petition when told that Wadhawan had already been released from jail.

Wadhawan, 46, was arrested on Jan. 27 by the Enforcement Directorate under the Prevention of Money Laundering Act. While granting bail, the court directed Wadhawan to be at the ED office whenever he is summoned.

He shall not tamper with prosecution evidence and shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case, the court said. It directed him to not go out of the country and ordered him to surrender his passport.

Within hours of the special court granting him bail, the ED approached Bombay High Court and sought a stay on the order. The appeal was taken up for hearing in the evening by Justice Prithviraj Chavan. The court was, however, informed that Kapil Wadhawan was already released from the Arthur Road prison. The ED then withdrew its petition as it had become infructuous.

Claiming he had no connection with the transaction of Mirchi’s properties, Kapil Wadhawan had moved a bail plea before special PMLA court judge P Rajvaidya earlier this month. While arguing for his bail, defence lawyer Amit Desai submitted that the transaction of DHFL, which the ED has cited for Kapil Wadhawan’s arrest, has nothing to do with dealings of Mirchi.

During arguments, the ED had opposed the bail plea on several grounds, including that Kapil Wadhawan may influence the probe. According to the ED, Kapil Wadhawan was instrumental in laundering of huge amounts of money as part of an illegal deal with Mirchi. A sum of Rs 12,773 crore was siphoned off from DHFL on the pretext of providing loans to one lakh fictitious customers, the ED said.

A part of this loan was used to make payments to Mirchi, who died in 2013 in London, it said. Mirchi’s Mumbai properties were sold to Sunblink Real Estate Pvt Ltd, a company linked to the Wadhawan brothers, Kapil and Dheeraj, the central agency has said.

The agency has alleged Kapil Wadhawan ‘diverted’ funds from DHFL to shell companies and later these dubious entities got amalgamated with Sunblink to "cover" alleged diversion of loans acquired from the housing finance firm.

Mirchi was allegedly the right-hand man of Dawood Ibrahim in the latter’s drug trafficking and extortion businesses.

Also read: Enforcement Directorate Attaches Rs 600-Crore Worth Assets In Iqbal Mirchi Money Laundering Case

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