In his letter Swami also explained how crores of rupees of money laundering had taken place to support Indiabulls Housing Finance and its related real estate firms.
Indiabulls Group stocks were hammered on July 29, losing 5-10 percent intraday, after a media report said that in a letter to Prime Minister Narendra Modi, BJP leader Subramanian Swamy had accused the group of embezzling Rs 1 lakh crore.
Indiabulls Housing Finance Ltd (IBHFL)and Indiabulls Ventures fell as much as 10 percent, Indiabulls Real Estate was down 8.5 percent and Indiabulls Integrated Services was locked at 5 percent lower circuit at Rs 121.50 on the BSE.
Swamy's June 28 letter, which was circulating in social media, alleges that more than Rs 1 lakh crore was embezzled from National Housing Bank (NHB), a charge denied by Indiabulls Housing.
Indiabulls Housing said it had never taken any loan or refinancing facility from NHB. The total loan book of the company was approximately Rs 87,000 crore, it added.
In a tweet on July 29, Swamy said it was necessary to “pierce the corporate veil, behind which the India Bull is situated”.
"All leads on the ‘Bull’ point to Ali Bibi alias TDK, and her 40 chors. But govt should see that unsuspecting investors are not unduly harmed," it added.It is necessary now to pierce the corporate veil, behind which the India Bull is situated. All leads on the "Bull" point to Ali Bibi alias TDK, and her 40 chors. But govt should see that unsuspecting investors are not unduly harmed.
— Subramanian Swamy (@Swamy39) July 29, 2019
In his letter, Swami has also claimed money laundering, saying the group was staring at a collapse. "As per credible information that I have, and after perusal of many available documents, I wish to inform you that India Bulls Housing Finance Limited and its associates is heading now for a financial collapse and bankruptcy, resulting large corruption issues in real estate sector, banking, stock markets and loss of more than Rs 1 lakh crore of funds of public and of National Housing Bank."
He alleged that Indiabulls Housing and its firms had set up shell real estate firms to take loans from NHB. The money was re-allotted or siphoned it off to real estate firms in Maharashtra, Delhi, Gurugram, Bengaluru. “After allotting these loans to other friendly real estate firms India Bulls accepted these amounts back as an investment to them! Some of such dubious loans were just book entries. That is, nothing but money laundering and round-tripping," Swamy said in his letter.
At 10:55 hours IST, Indiabulls Housing was down 7 percent at Rs 580.80, Indiabulls Real Estate down 5.20 percent at Rs 100.35 and Indiabulls Ventures slipped 7.85 percent at Rs 248.90 on the BSE.