The Enforcement Directorate (ED), on January 27, arrested Kapil Wadhawan, the promoter of Dewan Housing Finance (DHFL) in connection with the Iqbal Mirchi case, making it the fifth arrest in the connection with the late aide of Dawood Ibrahim and drug trafficker.
ED officials had filed its chargesheet on the case in December last year in which 16 persons and organisations were named as accused. Among these also included Kapil Wadhawan’s brother Dheeraj Wadhawan.
The ED, through their probe, found that Kapil Wadhawan created shell companies and diverted around Rs 2,186 crore; money that was used to buy properties of Iqbal Mirchi in Worli.
The probe revealed that Kapil Wadhawan had bought shares in five companies, identified as Faith Realtors, Marvel Township, Able Realty, Poseidon Realty, and Random Realtors.
These five companies were then given loans from DHFL without following any procedure, keeping any collateral, or following any Know Your Customer (KYC) rules. The loan details are :
Faith realtors: Rs 685 crore.
Marvel township: Rs 510 crore.
Able realty: Rs 215 crore.
Poseidon realty: Rs 392 crore.
Random realtors: Rs 353 crore.
ED officials found out that Dheeraj Wadhawan held several meetings with Mirchi and his sons Asif and Junaid in London. The officials also found out that Mirchi had bought a hotel named Midwest Apartments in Dubai from the money paid to him by Dheeraj Wadhawan for three properties in Worli.
Advocate Ajay Vazirani of Hariani and Company who was the solicitor for Sunblink Real Estate, in his statement to ED officials, confirmed that AED 50 lakh was transferred to Mirchi's Emirates Ismalic Bank account.
Another accused in the case had told the ED that Rs 150 crore were sent overseas to Mirchi till his death in Dubai, partly in the names of Imperial Suites Hotel and Desert Hotel, and partly in cash.
According to Mirchi's brother Aslam Merchant, Mirchi was paid was around Rs 111 crore in India. Of this amount, Rs 50 crore was arranged by Sunblink Real Estate as a loan to Mirchi from DHFL without any collateral or KYC. It was later repaid by RKW Developers, another company that belonged to the Wadhawans.
The loans were provided on an interest of 5-6 percent per annum . An amount of Rs 50 crore was then disbursed by DHFL to Sunblink Real Estate without any background checks. The probe revealed that Sunblink Real Estate was given a loan when it did not have any assets except properties under the name of Iqbal Mirchi.
The payment for the said properties was made by a loan acquired from DHFL, and though Dheeraj Wadhawan in Dubai. The probe revealed that Kapil Wadhawan was the CMD and CEO of DHFL, and one of the promoters of RKW Developers, and was virtually in control of affairs at DHFL and RKW Developers.
The probe revealed that around the time when the five companies got loans of around Rs 2,186 crore from DHFL, shares of these companies were bought by Kapil Wadhawan with the help of Sunny Bhatija at the time when Dheeraj Wadhawan was buying Iqbal Mirchi's properties.
The loans sanctioned to the above five companies were between 2010 and 2011 and remained unpaid till July 2019, leading to the total outstanding amount of Rs 2,186 crore.
The probe reavealed that Kapil Wadhawan couldn’t produce any documents available with DHFL in regards to these five loans. The ED investigation also brought to light that no collateral was taken against these loans. The investigating agency contacted the directors of the five companies and found that these companies were created by Wadhawans and they were the sole beneficiaries.
They also revealed that these were shell companies. Kapil was the CMD of DHFL, and misusing his position, siphoned off large amount of monies from the company and diverted it to buy proceeds of crime.
The five companies later got amalgamated in Sunblink Real Estate, which was owned by the Wadhawans and the loan outstanding of these five companies was appropriated to the books of Sunblink Real Estate, and a new mortgage was created in name of the three properties of Worli, having security of Rs 2,186 crore.
ED officials informed the Prevention of Money Laundering Act (PMLA) Court that they needed to trace the money trail, and find out the method diversion of funds carried out by Kapil Wadhawan and the end use for the large sum. ED officials also informed the court that role of Kapil Wadhawan was very crucial and thus he needs to needs to be interrogated. The PMLA Court sent Kapil Wadhawan to ED custody till January 29.
Earlier in the day, Dheeraj Wadhawan appeared before the PMLA Court. He was summoned by the court along with Hajra Memon, Junaid Memon, Sunny Bhatija, Asif Memon.
Bhatija and Dheeraj were granted bail by the PMLA court. ED had earlier sought a non bailable warrant against the five accused for non cooperation.
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