A Boring Fraud Episode

Today’s episode is about a routine and now boring corporate fraud. We have seen and discussed too many of them.

But whenever new findings of corporate fraud are unearthed, they do shock us, about the impunity with which certain individuals gamed the system, hand in glove with their colluders and blatantly cheated/looted public money. We had spoken about how Rs.12773 crores were fraudulently siphoned out of DHFL, through a web of 79 shell entities and under the garb of 100,000 bogus loans. In its ongoing investigation, in this case, the ED says that it has found assets worth over Rs.3000 crores which are owned by its promoter Mr. Kapil Wadhawan, who continues to be in jail, as the authorities investigate his dealings with an underworld gangster, the late Iqbal Mirchi. The illegal assets of Kapil Wadhawan, which have been built out of the loot of over Rs.12000 crores from DHFL include:-

A 12000 sq.ft. parcel of land in Melbourne, Australia, worth Rs.1000 crores, a villa in Thailand worth Rs.50 crores, flats and offices in UK/USA, four flats and a restaurant in Khar worth Rs.155 crores, numerous flats in Pali Hill, a villa at Juhu, a mall in Bhandup worth Rs.150 crores and 570 flats in Kurla worth Rs.1000 crores. That excludes fancy personal assets like high-end cars, a huge cache of jewellery, and numerous immovable assets, in and around Mumbai. It has also been found that shares of DHFL were merrily rigged, at the cost of the unsuspecting ordinary shareholders. We are certain that lots of assets generated out of this massive loot of thousands of crores are yet hidden and could be situated not just in India, but with a worldwide footprint.

Also Read: What are the real figures Mr. Ambani

Such a huge base of illegal assets:-

• Did not get generated overnight, and was thus very well planned, so as to let it not be reported.
• Did not get created through a single transaction and would have necessarily involved hundreds of illegal transactions which were not objected to by all those who were party to them.
• These funds were siphoned away and assets were illegally built, through a variety of transactions involving hawala, money laundering, tax evasion, and siphoning of funds. They were all overlooked.
• The transactions involved multiple bank accounts; none of the bankers involved objected in any manner.
• The transactions spanned multiple nations and territories, none of whom raised a red flag.
• The transactions of siphoning involved multiple laws and various authorities and were not red-flagged under any of them.
• Accounts and records were manipulated for all these years, with the current/collusion of all those who were meant to object/report them.
• The transactions involved the typical modus operandi of benami/shell compliances, siphoning into assets hidden abroad, hawala, bogus transactions, benami deals and comingling with proceeds of crime.

The ones who suffered the most have been the public whose funds were defrauded, whether directly or indirectly and the ones who got punished/disciplined the most are the auditors, the least punishment is to the bankers and the ones who got away scot-free are the independent directors, who turned out to be the dog that did not bark. And finally, it was the law of the land, that was violated the most.