Indiabulls Housing Finance Refutes Allegations Of ‘Round-Tripping’ Of Money Amid Share Price Slump
The allegations are a malicious attempt to derail merger of Indiabulls Housing Finance and Lakshmi Vilas Bank, says MD Gagan Banga
Indiabulls Housing Finance Ltd. has refuted allegations of “round-tripping” of money from borrowers to personal companies of its Founder and Chairman Sameer Gehlot, calling it a malicious attempt to derail its merger with The Lakshmi Vilas Bank Ltd.
The Citizens Whistle Blowers Forum filed a Public Interest Litigation alleging dubious loans routed back to the promoter’s personal entities. Supreme Court lawyer Prashant Bhushan, also a member of the forum, confirmed that the PIL has been filed.
Gagan Banga, the vice chairman and managing director of Indiabulls Housing Finance, said, “These spate of moves are clearly motivated to perhaps disrupt the merger process. And this time we have chosen to fight this out in court to end the speculation once and for all.”
“What perhaps some of these whistleblowers or blackmailers or whoever they are, are wishing to not understand that a company which is a regulated entity goes through annual financial inspections,” Banga had told BloombergQuint in an interview before the PIL was filed.
After similar allegations surfaced earlier, the listed entity submitted itself to various regulators for inspection over the last three to four months, Banga said.
On Friday, shares of Indiabulls Housing Finance fell as much as 9.6 percent intraday—the most since Aug. 16—to Rs 405 apiece. That made the stock the worst performer on the NSE Nifty 50 Index.
Banga said that no borrower of Indiabulls Housing Finance, on date, has a single rupee of investment in Gehlot’s entities. Gehlot is currently debt-free, he said, pointing out that the basic facts of the allegation are incorrect.
“If you go through further details, it is more malicious. Even this whole attempt that the PIL has not been filed and been circulated on WhatsApp. I fail to understand what is the logic other than to create sensationalism,” Banga said.
We had lent out monies to the ADAG Group and the ADAG Group has paid us already back in full... If our stakeholders have benefited from the loaning transaction which has gotten back our principle and interest and we have made a profit on that, and despite that it being used by whistle-blowers to create sensationalism then I don’t know how else am I suppose to conduct business.Gagan Banga, Vice Chairman And Managing Director, Indiabulls Housing Finance
In July, Bharatiya Janata Party leader Subramanian Swamy had accused the company of money laundering and embezzlement, in a letter to Prime Minister Narendra Modi which he later posted on Twitter.
These developments come amid a proposed merger between Indiabulls Housing Finance and Lakshmi Vilas Bank which has received approval of the Competition Commission of India. The Reserve Bank of India is yet to give its approval.