Delhi High Court Admits Petitions To Probe Indiabulls Housing Finance
The Indiabulls signage is displayed on a building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Delhi High Court Admits Petitions To Probe Indiabulls Housing Finance

The Delhi High Court has agreed to hear a plea seeking probe against Indiabulls Housing Finance Ltd. for allegedly advancing dubious loans, misappropriation and diversion of funds to the promoters of Indiabulls.

The Indiabulls Housing Finance stock reacted adversely to the development, falling as much as 7.34 percent intraday, before closing 6.11 percent lower at Rs 389.45.

Delhi High Court Admits Petitions To Probe Indiabulls Housing Finance

On Friday, a Delhi High Court bench, headed by Chief Justice DN Patel, issued notice to Indiabulls Housing Finance, the Reserve Bank of India, Securities and Exchange Board of India and asked them to file their replies within two weeks.

The petitioners ‘Citizens Whistle Blowers Forum’ were represented by Senior Advocate Chander Uday Singh who argued that Indiabulls Housing Finance had advanced loans in a dubious manner to a number of companies and the money was routed back to the promoters thereby increasing their personal wealth. The petitioners based their argument on the basis of five companies which had received loans from Indiabulls Housing Finance.

“There are many newspaper reports, primary documents such as balance sheets, ROC [Registrar of Companies] records which are available in the public domain which show the irregularities and illegalities committed by the IBHFL,” the petition said.

“These documents show that IBHFL and companies owned by its promoters have been involved in round tripping of funds in violation of the relevant laws and policy guidelines and they have also not disclosed sources thereof and their books of account also did not show the true state of affairs,” it said.

Indiabulls Housing Finance, however, contended that all the loans advanced by the company have been audited and no wrongdoing has been committed. Senior Advocate Mukul Rohatgi argued that the petitioners had come to court without any research and their aim was to defame the company and its promoters.

The bench, however, expressed its inclination to hear the case and issued notice to the parties in the case. The next date of hearing has been fixed for Dec. 15, 2019.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.