Dewan Housing Finance Corporation fell 15.32% to Rs 136.85 at 13:48 IST on BSE on reports the government has launched a probe into allegations of financial mismanagement against the company.
Meanwhile, the S&P BSE Sensex was up 577.15 points, or 1.62% to 36,168.40 .On the BSE, 72.80 lakh shares were traded in the counter so far compared with average daily volumes of 21.70 lakh shares in the past two weeks. The stock had hit a high of Rs 158.90 so far during the day. The stock had hit a a low of Rs 129.60 so far during the day, which is also a 52-week low for the counter. The stock hit a 52-week high of Rs 690 on 3 September 2018.
According to media reports, India's Ministry of Corporate Affairs will look into allegations against Dewan Housing Financial (DHFL) following a report by investigative media outlet Cobrapost.
According to story published on 29 January 2019 by investigative news portal Cobrapost, the primary promoters of DHFL siphoned more than Rs 31,000 crore of public money. The story alleges that the scam was mainly pulled off through grants of loans and advances to shell companies. The same money was then re-routed via these dubious companies and parked outside India so as to acquire assets.
Shares of DHFL fell 8.01% to end at 170.05 on 29 January 2019. The stock is down 34.58% in four trading session from recent closing high of Rs 209.20 on 25 January 2019.
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DHFL clarified after market hours on 29 January 2019, that it is a publicly listed housing finance company and is regulated by the National Housing Bank and the Securities and Exchange Board of India, amongst other regulators. This mischievous misadventure by Cobra Post appears to have been done with a mala fide intent to cause damage to the goodwill and reputation of DHFL and resulting in erosion in shareholder value.
DHFL on 29 January 2019 received an email at 8.44 a.m. in the morning, with a follow-up reminder one hour later, seeking answers to 64 questions from Cobra Post, many of which were laced with political innuendos. DHFL said it is shocked and surprised to receive this inquiry, although Cobra Post had announced its press conference last Friday, i.e. 25 January 2019, to disclose an alleged financial scam. One would have expected as a responsible media house Cobra Post would have asked these questions during their investigations and not on the day of the press conference.
Their entire approach raises serious concerns about the motivation of this so-called expose. It is necessary in public interest that if they believed in the genuineness of their issues to have given DHFL an opportunity to explain' the facts that are in any case available in the public domain.
DHFL is one of the leading and most respected housing finance companies in India with over RS 1,11,000 crore of assets under management and a large customer based across the country. Despite the recent liquidity regime, DHFL as a responsible corporate has met all its obligations to the lenders and has paid back to them in excess of Rs 17,000 crore in the last three months. DHFL has a strong corporate governance regime and has received AAA credit rating from leading credit agencies. The company is fully tax compliant and its books are audited by global auditors.
The company added that it understands, for the last several weeks, an anonymous note has been making the rounds with similar defamatory and scurrilous allegations. The real intent of this exercise appears to be to destabilize the company and the market equilibrium besides hampering the company's meeting the on-going obligations. The company said it is also concerned about the timing and the holding of the press conference before the stock market close and days before the interim budget.
DHFL is a responsible and law-abiding corporate and all loans are disbursed in the normal course of business in accordance with industry best practices and in compliance with all regulatory norms. The company's financial statements are submitted to the stock exchanges and are in the public domain. DHFL and its group companies are confident of meeting any scrutiny on any aspect of its operations and will pursue these frivolous allegations to its logical conclusion.
Net profit of Dewan Housing Finance Corporation declined 36.70% to Rs 313.60 crore on 12.40% rise in total income to Rs 3255.89 crore in Q3 December 2018 over Q3 December 2017.
DHFL provides home loan products including loans on homes, residential plots, construction, LAP or loan against property as also mortgage, non-residential and project loans.
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