Former DHFL executives granted bail in provident fund fraud case

The former CMD of Dewan Housing Finance Ltd (DHFL), Kapil Wadhawan, and his brother Dheeraj Wadhawan were granted bail in a multi-crore provident fund scam case by the Allahabad High Court. The two accused have been in jail since May 2020, and their bail applications argued that they cannot influence the probe as the charge sheet has already been filed, and the trial has yet to begin.

The FIR in the case was lodged on November 2, 2019, on the complaint by IM Kaushal, then Secretary, Trust of Uttar Pradesh Power Corporation Limited (UPPCL). The names of the Wadhawans came up during the probe, and it was alleged that they had violated the procedure laid down by a 2015 notification of the Centre by investing GPF and contributory PF in DHFL in March 2017.

It was alleged that in 2013, the board of trustees had decided that the GPF amount would be invested in fixed deposit schemes of nationalised banks for one to three years. However, in 2014, they considered other options like investments in banks, which were secured and gave higher assured interest.

In December 2016, on Praveen Kumar Gupta's proposal, approved by Sudhanshu Dwivedi and AP Mishra, the GPF and contributory PF amount were invested in fixed deposit schemes of PNB Housing. Gupta and Dwivedi allegedly violated the procedure laid down by the 2015 notification of the Centre by investing GPF and contributory PF in DHFL in March 2017. The bail of the Wadhawans has come as a relief for them, and they can now defend themselves in the trial.

In the wake of the DHFL scam, the Reserve Bank of India (RBI) had superseded the board of DHFL in November 2019 and initiated the resolution process. In January 2020, DHFL had become the first financial services company to be referred to the National Company Law Tribunal (NCLT) for insolvency proceedings.

According to the NCLT order, the resolution process for DHFL had to be completed within 330 days. However, the resolution process was delayed due to the COVID-19 pandemic, and the deadline was extended. In November 2020, Piramal Group had emerged as the highest bidder for DHFL, and in January 2021, the RBI approved Piramal Group's resolution plan.

The 2019 FIR was filed against Praveen Kumar Gupta, then-secretary of the trust, and Sudhanshu Dwivedi, the then-director of finance. However, the Wadhwans were held accountable. Justice Subhash Vidyarthi has passed the current order on the grounds that the trial had not started, and the accused had been in jail for a long time.

The Allahabad High Court's decision to grant bail to the Wadhawan brothers has been met with mixed reactions. Some have criticized the decision, arguing that the accused could still influence the witnesses or tamper with the evidence. Others have welcomed the move, stating that it is in line with the principles of justice, as the accused have been in jail for almost a year.

Next (Ahmedabad Authority repurposes unclaimed INR 20 Crore to plant 100,000 trees for urban greenery)

Former DHFL executives granted bail in provident fund fraud case

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