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.
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The story alleges that DHFL and its primary promoters created dozens of shell companies with a nominal capital of ₹1 lakh, and divided them into smaller groups of 2-4 companies. A lot of these companies have the same or similar addresses and the same set of initial directors, as well as the same group of auditors to cover up the financial details of these companies. It has been alleged that DHFL’s primary promoters disbursed huge loans to these groups of shell companies—mostly without any kind of collateral— the proceeds from which “appear to have been used for creation of private assets both offshore and in India”. The story claims that DHFL’s primary promoters disbursed thousands of crores worth of loans to these shell companies in the name of secured loans against slum development projects, without any due diligence or maintaining an equity ratio.
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What is notable is that according to a copy of DHFL’s annual report, the company has secured loans from at least 36 banks in total—32 nationalised and private banks and six foreign banks. Of the 32 nationalised banks, State Bank of India had sanctioned the highest amount of loan to DHFL as on April 6, 2018, amounting to nearly ₹12,000 crore, followed by Bank of Baroda (₹4,396 crore), Bank of India (₹4,150 crore) and Canara Bank (₹3,100 crore). When it came to foreign banks, these included CTBC Bank Co Ltd, which had loaned DHFL a whopping $10,0000,00, Taiwan Business ($5,000,000), and Barclays Bank PLC ($30,000,000).
Source: https://www.newslaundry.com/2019/01...s-siphoned-over-rs31000-crore-of-public-money
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