Indiabulls Housing stock slides 5% on allegations of fund diversion

Shares of Indiabulls Housing Finance closed 5 per cent lower on Friday following reports that a fresh public interest litigation (PIL) had been filed against the company in the Delhi High Court, seeking an investigation into its affairs.

Since January this year, Indiabulls Housing Finance has lost almost half of its market value, which stood at Rs 18,202 crore as of Friday. The loss in market valuation of all Indiabulls group listed companies was Rs 36,956 crore since January 1.

The company announced a merger with Lakshmi Vilas Bank on April 5, but it is yet to be cleared by the Reserve Bank of India.

In a statement to the stock exchanges, Indiabulls said similar allegations were already filed under various individual names in July 2019 and that the petitioners had deliberately chosen the route of PIL to attract attention and play into the hands of blackmailers and corporate rivals at a sensitive time of merger.

For the last three months, the company said, it was undergoing various inspections and scrutiny of all the different regulators as part of the merger process and the company was determined to fight out the petitioners in the court. The company said the petition was leaked in the social media with malicious intent and vested interests to create turbulence in the stock price of the company.

“The purported PIL admits that the allegations are the same as in the petition of earlier petitioner Abhay Yadav which was subsequently withdrawn. Abhay Yadav in his statement has admitted that the allegations against the company were based on false, incorrect and twisted data,” the company said.

 “He had filed the petition at the behest of the mastermind of the blackmailing racket who was then subsequently arrested and is currently in jail. The courts have denied the bail application of the mastermind,” the company said.

The PIL, filed on Friday by Citizens' Whistleblowers Forum lawyer Kamini Jaiswal, appeals to the high court to initiate an enquiry into Indiabulls group.

The PIL alleges that the company registered 12,000 shell companies from the same location and has diverted funds from the NBFC to other companies in contravention of the RBI norms. The High Court is expected to hear the matter next week.