The Central Bureau of Investigation has taken over the probe into alleged irregularities in the investment of over Rs 4,100 crore Employees’ Provident Fund (EPF) of Uttar Pradesh Power Corporation Ltd (UPPCL), the state-owned power firm, in the scam-tainted Dewan Housing Finance Corporation (DHFL), officials said on Friday.
The agency has named Praveen Kumar Gupta, the then secretary of the UP Power Sector Employees’ Trust, and Sudhanshu Dwivedi, the then Director Finance of UPPCL, in its FIR registered last evening for criminal breach of trust, cheating and forgery. Gupta and Dwivedi were arrested by UP police in November 2019.
The CBI took over the case after getting permission to take action against the UP government officials from the department of personal and training.
The illegal investment of EPF by the state power firm in DHFL happened between March 2017 and December 2018. The case is already being probed by the Enforcement Directorate (ED).
The UP government had ordered a vigilance probe into alleged irregularities in UPPCL’s investment of employees’ fund in the controversial Mumbai-based company DHFL over a span of two years.
Of late, DHFL has been in the news for all the wrong reasons. The Reserve Bank of India had initiated insolvency proceedings against the housing finance firm, and in another case, Kapil Wadhawan, erstwhile promoter of DHFL, was arrested by the ED earlier this year for alleged links with late gangster and trusted Dawood aide Iqbal Mirchi. In this case, the directorate has found Rs 12,000 crore money laundering using more than a lakh fictitious accounts. The ED has accused Wadhawan of using a maze of shell companies to launder over Rs 3,200 crore to Mirchi.
DHFL owes over Rs 1 lakh crore to multiple financial institutions, including around Rs 40,000 crore to banks. The ED has found misappropriation of funds worth Rs 12,773 crore by DHFL, and another Rs 20,000 crore is untraceable as per a KPMG forensic audit report.
The ED is also examining the financial records of five shell firms under DHFL. The investigators had confronted the officials of five shell firms, whose loan liabilities were appropriated in the books of the private firm Sunblink. The company bought three Worli–based assets of Mirchi in 2010. Sunblink was allegedly under the control of Wadhawan, and Dheeraj Wadhawan, a non-executive director of DHFL, was also named in the charge sheet which was filed last month.
The ED probe revealed that DHFL allegedly diverted Rs 2,186 crore through five shell firms that received loans by illegal means and that a part of the diverted money was used for paying Mirchi for the three Worli-based properties under his name in 2010.