DHFL case: Auditor Grant Thornton reports fraudulent transactions worth Rs 2,150 crore

Debt-ridden mortgage lender DHFL on October 6 said that fraudulent transactions worth Rs 2,150.84 crore by way of undervaluing the company's insurance subsidiary have been detected by transaction auditor Grant Thornton. DHFL is undergoing resolution process under the Insolvency and Bankruptcy Code.

Earlier this year, the company's administrator roped in Grant Thornton to conduct an investigation into the affairs of the mortgage firm. According to the auditor's report, the Rs 2,150.84 crore-fraud was in relation to the undervalued and fraudulent nature of certain agreements entered into by the DHFL when the company sold its stake in Pramerica Life Insurance Ltd to DHFL Investments Ltd (DIL), as per a regulatory filing.

Based on the report, "the administrator has filed an application in respect of agreements executed at the time of selling the company's stake in Pramerica Life Insurance Company Ltd (erstwhile DHFL Pramerica Life Insurance Ltd) to DIL and in respect of certain Inter-Corporate Deposits (ICDs) given by the company to certain entities (ICD entities) before the Mumbai bench of the NCLT". This is the third filing based on the report submitted by the auditor and further filings may be undertaken in due course, the company said.

Indian Overseas Bank's former Managing Director and CEO R Subramaniakumar is the company's administrator. As per the report, the monetary impact of such transactions covered under the application amounts to Rs 1,864.84 crore — which includes principal of Rs 1,739.57 crore and accrued interest of Rs 125.27 crore — being the amount outstanding in the books of the company as on November 30, 2019.