Indiabulls Housing Finance Says Petition Against Company, Chairman Gehlaut Withdrawn

Indiabulls Housing Finance Ltd. today said that Abhay Yadav, the petitioner who alleged that the company and its Chairman Sameer Gehlaut misappropriated funds, withdrew his writ petition from the Supreme Court.

The stock jumped as much as 10.9 percent to Rs 688.70 after the lender informed the exchanges. It had fallen close to 5.3 percent during the opening trade.

According to the company’s statement, Yadav in his affidavit mentioned that he is not aware of the allegations and that the documents signed by him must have been misused to file false petition against the company with malafide intentions.

BloombergQuint has not corroborated with Yadav or independently verified the company’s statement.

Ajit Mittal, executive director of Indiabulls Housing Finance, said that the company knew from the very beginning that the claims were “rubbish” and who the mastermind behind the manipulation was. “Society and the government as a whole have to collectively ponder whether this kind of sensational, conspiratorial and extortionist rackets by professional groups that are going on holding the corporate world to a ransom, there has to be a mechanism to deal with this. This is what the broader issue is,” he told BloombergQuint.

On June 10, a plea was filed in the Supreme Court seeking legal action against Indiabulls Housing Finance, Gehlaut and its directors for alleged misappropriation of funds worth Rs 98,000 crore. The petition alleged that money worth thousands of crores was siphoned by Gehlaut and directors of the firm for their personal use.

The company had refuted the claims, terming the accusation as “bizarre” and made by a “racket of blackmailers”.

On June 12, Indiabulls also moved the Supreme Court seeking urgent listing of a plea filed against it. Senior advocate AM Singhvi, appearing for the company, told a vacation bench comprising of Justices Indira Banerjee and Ajay Rastogi that the frivolous allegation had been leaked to the media leading to a loss of Rs 7,000 crore in market capitalisation. He also told the bench that Yadav had bought four shares of the company worth Rs 3,000, with the sole intention of blackmail.

Today’s statement quoted Yadav saying that the four shares of the company were purchased in his name in May 2019, and that is when he was asked to sign a detailed complaint addressed to various government officials and ministers. “The four shares were bought only to give the legitimacy of a whistleblower,” Mittal said.

JN Gupta, former executive director with the Securities Exchange Board of India, said this incident must be investigated and brought to its logical conclusion as soon as possible. “One has to really get a system to filter out such complaints. If the stock market can be held ransom to somebody's false complaints and go up and down, then the entire credibility goes,” he said, adding that it is a reason for worry.