'No irregularities': MCA relief to Indiabulls Housing Finance, for now

The Ministry of Corporate Affairs (MCA) on Thursday said it has found no irregularities in the loans given to five companies by Indiabulls Housing Finance, as alleged in a public interest litigation (PIL), sending the stock up more than 24 per cent.

The ministry said this in an affidavit submitted in the Delhi High Court. It is, however, still probing the company, one of the country’s largest real estate lenders, and has sought two months’ time for filing additional affidavit in this matter. Any violations will be dealt with “as per law”, the MCA said.

“After receipt and confirmation of the inspection report, we will submit another affidavit… No clean chit has been given in this matter and only factual information has been shared with the court,” a senior government official told Business Standard.

The company’s scrip reacted sharply to the news, surging to an intra-day high of Rs 347.65 on the BSE before closing the day with a 24.7 per cent gain at Rs 334.20.

Gagan Banga, managing director, Indiabulls Housing Finance, said: “The affidavit filed by the MCA on the specific subject of the five loans mentioned in PIL vindicates all of what we have been saying for the last six months.”

“We have been transparent with MCA and other regulatory bodies and strongly believe that the strength of our facts will eventually prevail.”

The affidavit was filed before a bench of Chief Justice D N Patel and Justice C Hari Shankar and the PIL by the non-profit organisation, Citizens Whistle Blower Forum, is listed for hearing on Friday.

In its affidavit, the MCA has stated that of the five DLF, Reliance ADAG and Americorp Group have fully repaid the loans to Indiabulls while the other two — Vatika Group and Chordia Group — are “standard accounts” which have been servicing the debt regularly and have made partial payments against the loan.

A PIL was filed in the matter on September 27 alleging round-tripping of funds by the firm. The company, while contesting the claims as “malicious”, had also sought recall of the notice claiming that each day the matter was pending it was suffering huge financial losses as its share value was dipping day by day.

The document submitted in the court has found instances of violations which are still being probed by the office of Regional Director-northern region.

“Two truck load of documents have been examined by us so far. We are probing the case still,” another senior government official said.

In a previous affidavit, the MCA had informed the court that it had received several complaints against the Indiabulls Group of companies and some of them are being inspected.

In October this year, the Reserve Bank of India quashed a proposed merger of Indiabulls Housing Finance with Lakshmi Vilas Bank.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel