DHFL posts net loss of Rs 6,640 crore; interest income declines 34%

DHFL is the first financial services firm undergoing bankruptcy proceedings after the Centre notified the law on Nov 15

Mortgage lender Dewan Housing Finance (DHFL) has reported a net loss of Rs 6,640.62 crore in the September quarter (Q2FY20), compared to a net profit of Rs 439.51 crore in the same period last financial year.

The interest income of the company declined more than 34 per cent to Rs 2,123.05 crore in Q2FY20 against Rs 3,244.90 in Q2FY19. Similarly, the total income of the housing finance company declined almost 26 per cent to Rs 2,581.16 crore in Q2FY20, compared to Rs 3,486.88 crore.

The consolidated revenue from operations of DHFL dropped to Rs 2,106.71 crore over Rs 3,483.32 crore in the year-ago period. The firm has said that the losses made by them are fully attributable to the owners of the parent.

“The investment advances by way of unsecured Inter Corporate Deposit (ICD) aggregating Rs 5652.69 crore were outstanding as of March 31, 2019. Of these, ICDs aggregating Rs 760.72 crore have since been repaid by the borrowers and ICDs aggregating to Rs 1306.61 crore have been converted into term loans as of September 30, 2019, resulting in an outstanding of Rs 3809.49 crore under ICDs, including interest receivable thereon,” said the statutory auditors of the company. 

Also, in the exchange filing, the company has stated the Ministry of Corporate Affairs has initiated an probe into the affairs of the company under Section 212(1) of the Companies Act, 2013, by Serious Fraud Investigation Office.  

The statutory auditors of the company have also pointed out that multiple accounting entries were initially recorded in certain customer accounts, receipts for which (cheques or negotiable instruments) had not been deposited in the bank. Moreover, they have also pointed out that there was a mismatch of Rs 3,018 crores that is yet to identified and mapped to individual parties and the underlying securities available, if any, out of the available surplus security covers.

DHFL is the first financial services firm undergoing bankruptcy proceedings after the Centre  notified the law on November 15. 

The Reserve Bank then referred it to the tribunal, having superseded the board of directors on November 20 and appointing R Subramaniakumar — former managing director (MD) of Indian Overseas Bank — the administrator.

Creditors to DHFL have claimed a total of Rs 87,905.6 crore in dues, according to the administrator appointed for the bankrupt company.