NEW DELHI: A Delhi court on Tuesday sent former DHFL director Dheeraj Wadhawan to jail after the CBI arrested him in Mumbai the previous evening for allegedly defrauding a 17-member bank consortium of Rs 34,000 crore. Dheeraj and his brother Kapil Wadhawan, another DHFL director, were previously arrested in the case on July 19, 2022. The CBI had filed a charge sheet against 75 entities, including the Wadhawan brothers, on October 15, 2022. Dheeraj, who had been previously arrested and released on medical bail, was re-arrested on Monday. His brother remains in custody. The CBI has been contesting the bail granted to Dheeraj by both the high court and trial court, and challenged the Delhi High Court's bail decision in the Supreme Court.

The brothers were granted "statutory" bail by a special court on December 3, 2022, due to incomplete investigation and a partial charge sheet. This decision was upheld by the Delhi High Court but later overturned by the Supreme Court, which noted legal errors by both the special court and the high court.

Dheeraj had received interim bail on medical grounds in a separate case from the Bombay High Court while being treated at Lilavati Hospital. This bail was regularized on May 2, and he was protected from CBI arrest for one week. After this protection ended, the CBI re-arrested him. Currently, Dheeraj, Kapil Wadhawan, and Ajay Nawandar are in judicial custody.

The CBI charged the Wadhawans and others based on a complaint from Union Bank of India, the leader of the consortium that extended Rs 42,871 crore in credit to DHFL between 2010 and 2018. The charge sheet alleges that Kapil and Dheeraj, in conspiracy with others, misrepresented facts, breached trust, and misused public funds to cheat the consortium of Rs 34,615 crore by defaulting on loan repayments starting in May 2019.

The CBI claims the company committed financial irregularities, diverted funds, fabricated records, and round-tripped funds to "create assets for Kapil and Dheeraj Wadhawan" using public money. DHFL loan accounts were declared non-performing assets at different times by the lender banks.

After allegations of fund siphoning surfaced in January 2019, lender banks appointed KPMG to conduct a "special review audit" of DHFL from April 1, 2015, to December 31, 2018. The audit revealed fund diversion disguised as loans and advances to related entities and individuals connected to DHFL and its directors. The account books showed that 66 entities linked to DHFL promoters received Rs 29,100 crore, with Rs 29,849 crore outstanding. Most transactions were investments in land and properties.