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Jan 309 min read

Of All the Superrich Wilful Defaulters, Why the Wadhawans alone?

Posted on 30/01/2024 (GMT o9:15 hrs)

It all started when Mr. Ajay Piramal suddenly declared in the beginnings of January 2019:

“Be prepared for one or two major shocks in the NBFC sector”.


THE CHRONOLOGY OF THE DHFL SCAM

Just one day after that, on 29th January, 2019, Cobrapost announced its findings on the biggest financial scam: DHFL. The BJP was found to be involved in the scam. Cobrapost also pointed out “terror-funding” as part of the scam.


HOW COULD THAT TERROR-FUNDING HAPPEN AFTER THE SUCCESSFUL DEMONETIZATION BY THE BJP GOVERNMENT?

DHFL allegedly defaulted on its debt repayment, resulting in a debt rating downgrade in June 2019.

DHFL rebutted all the allegations of either default, delay or insolvency. The Indian Credit Rating Agencies also reaffirmed their high safety rating (AAA rating) for the financial instruments issued by the DHFL at that time.

As evident from the following video, DHFL WAS MEETING ITS OBLIGATIONS on time:


DHFL was thoroughly well on track in terms of paying its FD and NCD holders as per the schedule.

It is also to be noted that DHFL was still the largest contributor to PMAY, wherein it contributed 100 units to the said scheme.

DHFL, for the owners of the company, viz., the Wadhawan brothers, was a solvent company that continued to get cash flows.

For Kapil Wadhawan in 2019, the situation was like the following:

If lending activities are cut despite all that solvent profitable activities of the company, some kind of asset-liability mismatch (ALM challenge) would take place and insolvency would ensue.

Was it thus manufactured that the DHFL HAD TO go under the IBC so soon in spite of the repeated assurances of the Wadhawans? This was nothing more than a temporary liquidity concern for them, which was supposed to be discussed, planned and sorted out with the Banks and other lenders. For them, there was (on record) no cutting down on payment obligations as such.⤡

Wadhawans (according to their statements) were also selling down retail assets for meeting obligations because of the then ongoing downgrade in the NBFC sector as a whole, which was not only restricted to the DHFL alone. Yet, the DHFL was in a solvent position with no immediate need for undergoing a resolution process.

See the following video:


Still after all that,

DHFL was put under the IBC in November-December 2019 as the first shadow bank. Wadhawans were accused not only of default, but also for opening fraudulent bank accounts to siphon off significant amounts of money. Thus began the CIRP that resulted into huge haircuts for the small depositors. Till now, these allegations against the Wadhawans are not based on conclusive, undisputable evidence.

In September-October 2019 previously, The Honourable High Court of Bombay in the case of Reliance Nippon Life Insurance v/s DHFL passed orders that restrained DHFL from making payments to any of its secured/unsecured creditors, including the payments to any fixed deposit holders. It is again to reminded that the DHFL WAS paying its FD and NCD holders till that time.

Kapil Wadhawan did predict this sort of situation and did warn everyone beforehand that if all these channels of cash flows are cut down upon, DHFL would be forced into bankruptcy.

In the meantime in April 2020, Banks wrote off 68k crore loans of the superrich wilful defaulters.

In December 2020, DHFL’s erstwhile promoter Kapil Wadhawan offered to repay DHFL’s creditors in full. The RBI-appointed CoC for DHFL rejected it almost immediately. (cf. “Bankruptcy will not void personal guarantees”: Supreme Court. 21/05/2021) ⤡

From December 2019 till January 2021, the RBI-appointed CoC for DHFL conducted 20+ meetings within the pandemic period. Competing bidders included Adani Group, Oaktree Capitals, Piramal Group etc. The Resolution Plan submitted by Piramal Group was finally approved by the CoC, avoiding highest bidder Oaktree.

On 03/12/2021, Oaktree Capitals alleged bias/partiality of the CoC in favour of the Piramal Group. Wadhawan reiterated his offer for 100% repayment, but it again fell on deaf ears.

This was followed by approvals from the RBI (February 2021) and the NCLT (June 2021), though the NCLT did ask the CoC to reconsider Wadhawan’s promise for full repayment (19/05/2021), which was left unanswered on the part of Piramal (the so-called successful bidder) and his CoC.

Two-three days after the RBI’s approval of Piramal’s resolution plan, Auditor Grant Thornton unearthed another fraudulent transaction by the DHFL through Forensic Auditing.

In March 2021, the CBI filed a new suit against DHFL and its promoters Kapil Wadhawan and Dheeraj Wadhawan, wherein the latter were accused of siphoning off the welfare subsidy fund of Pradhan Mantri Awas Yojana by creating 260,000 fake home loan accounts under the same scheme under the guise of a non-existent branch (“The Bandra Books”).

The question here is: HOW COULD ONE OPEN FAKE BANK ACCOUNTS AFTER THE SUCCESSFUL DEMONETIZATION AND THE AADHAAR-PAN LINKING PROCESS? AN OPEN LETTER TO MODIJI: THE HORNS OF THE DEMONETIZATION DILEMMA VIEW HERE ⤡

In March 2022 as well, Wadhawan again approached the Supreme Court with his offer for full repayment of all the creditors. Nothing happened.

In April 2022, The Enforcement Directorate (ED) alleged that Yes Bank co-founder Rana Kapoor and Dewan Housing Finance Limited (DHFL) promoters Kapil and Dheeraj Wadhawan siphoned off funds worth Rs 5,050 crore through suspicious transactions to fill up the gaps created by terror-funding/political charity.

The BJP received 27.5 crore worth of donations from the scam-hit DHFL, the Congress declared in June 2022.

In March 2023, The Supreme Court of India dismissed the allegations made by the Enforcement Directorate (ED) and instead upheld the default bail granted to DHFL’s ex-promoters Kapil Wadhawan and Dheeraj Wadhawan by the Bombay High Court in the Yes Bank-DHFL Money Laundering case. No criminal charges against the Wadhawan brothers have been proved conclusively yet. This has a direct binding on the future outcome of the DHFL case. Yes Bank-DHFL scam: Supreme Court upholds default bail granted to Kapil, Dheeraj Wadhawan VIEW HERE ⤡ (As reported on 27th March, 2023 ©Economic Times)

Now, let us turn to another aspect of this very issue.

Accused in the Yes Bank-DHFL case, the Wadhawans are thus in jail at present.

They are alleged by various journalists’ reports to be leading quite a luxurious life-style within the penitentiary. They have no lack of food or of entertainment.

The Wadhawans are being treated for their supposed “diseases/ailments” in fancy nursing homes while the DHFL victims are undergoing mental as well as physical trauma in their pauper-like condition!


Kindly note that Maharashtra is currently under the governance of the Bharatiya Janata Party (BJP) coalition with a faction of the Shiv Sena. It is also to be remembered that the faction of Shiv Sena and Nationalist Congress Party (NCP) members were bought by spending huge amount of money (horse-trading) and blackmailing. How can Wadhawans live such a luxurious life when the BJP coalition is in de facto power in the said state? Could they have done the same without political aid?

Moreover, the Wadhawan brothers travelled freely from Khandala to Mahabaleshwar, flouting COVID-lockdown regulations, with the help of government officials. How could they achieve that end without the help of the ruling party, i.e., BJP-Shiv Sena coalition?

It is inevitable that under such a situation, the accusations/blame-games between the ruling party, viz., the BJP, and the Opposition are bound to take place. While Congress Spokesperson Supriya Shrinate brought into focus the BJP-DHFL collusion through political donation/political charity by also pointing out the BJP’s leniency towards superrich wilful defaulters and the rising NPAs during the BJP’s regime, the BJP spokesperson Shaina NC made allegations about the Congress and NCP being close friends with the Wadhawans since a long time:


Supriya Shrinate has rightly pointed out various facts about the DHFL scam in press conferences previously:

It can be seen from the above account that the Wadhawans, though initially close to the Indian National Congress and Nationalist Congress Party (NCP), also were forced to grow affinities with the BJP, the ruling party, failing which, the DHFL was bound to fall of the cliff, which it did.

Moreover, it can be seen that neither the Godi nor the Non-Godi Media are caring much about the DHFL issue as a whole or in its entirety. Some of the Non-Godi Media, despite in early 2019, have not paid any heed to the issue, even after we have approached them multiple times. The Godi Media, though focusing on the blaming/accusing of the Wadhawans for allegedly wasting public money for their own comfort, are not focusing (obviously) on the BJP’s instrumental role in creating this scam in the first place.


Why are Godi Media reluctant to report on the biggest financial scam: DHFL?

Urging for Justice for the DHFL Victims: An Appeal to the Non-Godi Media

It can be seen that the Godi Media, whenever it reported something related to the DHFL issue, have a tendency to portray Mr. Ajay Piramal in a positive light and make Wadhawans the sole criminals. Why this relative importance or privilege given to Mr. Piramal? Is it because:

a) He is the secondary kin of the current ruling party’s favoured tycoon?

b) DHFL as a return gift through quid-pro-quo advantage-seeking in response to the Flashnet Scam?

Now, if the BJP is so angry with the Wadhawans about their alleged/supposed/possible “defaults” and “fraudulent deeds”, why is the BJP not similarly attacking the other many superrich wilful defaulters, who are still constantly receiving political protection from the BJP and have swiftly fled the country without having to meet any sort of legal difficulty to meet their due payment obligations? Why were the Wadhawans singled out, of all these people such as Mehul Choksi (whom the PM refers to as “Mehul Bhai”), Vijay Mallya, Nirav Modi, among so many others?

Interpol takes down Red Notice against Mehul Choksi VIEW HERE ⤡(As reported on 21st March, 2023 ©The Hindu)

We have already covered this issue in the following post:


Why is the Interpol not taking steps against the Indian super-rich willful defaulters listed under the red notice?

See how the BJP treated the “other” superrich wilful defaulters:


Dear Mr. Ajay Piramal, Wanna become wilful defaulters following the path of 50+ super-rich business barons

Let us compare the allleged DHFL default with the sum-total defaults made by the “other” superrich wilful defaulters, whom the BJP have “forgiven”:

Along with these continuous wilful defaults guarded by the BJP, the BJP’s own assets have multiplied in leaps and bounds:

BJP behind missing Rs 88,000 cr worth 500 notes VIEW HERE ⤡ (As reported on 18th June, 2023 ©Telangana Today)

BJP received donations not only from the DHFL, but also from the transparently opaque Electoral Bonds and PM CARES Fund.


Is there any one-to-one correspondence between Bharatiya Janata Party’s increasing assets and abrupt bankruptcies in India?

Legitimizing Bribery: Electoral Bonds and the Fall of Economic Justice

APPENDIX:

It is very difficult to understand the situation of the DHFL occupation at present as both Wadhawan Brothers and Mr. Piramal are favoured by the ruling party of India, i.e., the BJP, although in different ways. It may be conjectured that it is a game of money: terror-funding/political donation/political charity.

Satyajit Ray, in his film “Shakha Prashakha” (The Branches), had shown a honest Bengali business-person/capitalist, whose motto is: honesty is the best policy.

However, as a thumb-rule, there are no good capitalists as far as the Surplus Labour extraction or treating labour as labour-power (as a commodity) continues within the present economic framework.

On the other hand, the financial bourgeoisie, in the case of the DHFL, have become the prey of the monopoly-crony bourgeoisie. Therefore, the polarization of haves and have-nots has happened under the regime of neoliberal, cannibalistic, savage pre-debt-or capitalism.

Furthermore, it is also to be noted that the three international terrorist organizations, viz., the WB-IMF-WTO, are pouring huge debts on the Indian government for the ecological enemy, i.e., the so-called “Developmental” projects within the purview of Dollar (Neo-)Imperialism.

At end-September 2023, India’s external debt was placed at US$ 635.3 billion, recording an increase of US$ 6.4 billion over its level at end-June 2023.

This heavy burden of loan impacts on the money-based economy as hyper-inflation is the inevitable result of such indebted family of India. If a family is run by money, we cannot say that it is a healthy or holy family, keeping in mind that family is the miniature form of the state that is built on private property; though private property is not a fundamental right in a supposedly “socialist” [along with the necessary term “secular”, which is at stake due to the current ruling party’s kamandala politics, i.e., religious chauvinistic politics of hate, that goes against the Preamble and Article 51A(h) of the Indian Constitution] nation such as India.

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