PIL filed against Indiabulls against alleged irregularities including advancing of dubious loans

The Delhi High Court has issued notices to Indiabulls Housing Finance Limited (IBHFL), the Securities and Exchange Board of India (SEBI), Reserve Bank of India (RBI) and Ministry of Corporate Affairs (MCA) in a plea which sought a time-bound, Special Investigation Team (SIT) investigation into various alleged illegalities, siphoning of funds, and violations committed by the promoters of IBHFL and its subsidiaries.

The court has given two weeks’ time to the promoters of the IBHFL, SEBI, RBI, and MCA for a reply.

The plea sought directions to the Registrar of Companies (RoC), Serious Fraud Investigation Office (SFIO), National Housing Bank (NHB), RBI, SEBI to take action against IBHFL and its promoters/owners.

The Public Interest Litigation (PIL) has been filed by Citizens Whistle Blower Forum, a registered organization working to provide a platform to whistleblowers.

The modus operandi of IBHFL was to advance dubious loans worth billions of rupees to companies owned by large corporate groups which in turn have routed the money back into the accounts of companies owned by the promoters of IBHFL, thereby increasing their personal wealth. According to the petition, the primary documents of Indiabulls such as balance sheets, ROC records which are available in the public domain suggest a vast web of companies involved in various dubious deals, loans, investments, round tripping of funds to benefit the companies owned by the promoters of Indiabulls.

According to the Delhi High Court, tripping of funds by IDHFL warranted hearing by the Court.

The plea also sought direction to the MCA to conduct an investigation through the SFIO into the financial affairs of IDHFL and the companies involved in transactions with it. It sought directions to the RBI and NHB to investigate and audit financial affairs of Indiabulls.

It also sought direction to SEBI to conduct a thorough inquiry and investigation into the affairs of IDHFL.