MUMBAI: If sources in the Reserve Bank of India (RBI) are to be believed, the apex bank has given its nod to Piramal Capital and Housing Finance Ltd (PCHFL), a subsidiary of Piramal Group that was approved by the Committee of Creditors (CoC) as the successful bidder for debt-laden Dewan Housing Finance Corporation Ltd (DHFL) in January.

The CoC overlooking the CIRP had approved the resolution bid submitted by PCHFL at its 18th CoC meeting held on January 15, 2021 as it had received 94 per cent votes, as opposed to 45 per cent votes to competitor bidder Oaktree Capital.

The administrator of DHFL had intimated the Piramals’ on 22nd January 2021, vide Letter of Intent (LOI) that the CoC had declared its arm PCHFL as the 'Successful Resolution Applicant' in relation to the Corporate Insolvency Resolution Process (CIRP) of DHFL.

As per set process, the Administrator would have immediately sent the proposal to the RBI for its nod on the plan. According to experts practicing in the insolvency and bankruptcy sector, although this was almost a routine process there is a whole process before Piramals can take control of DHFL.

In early 2019 DHFL landed into deep trouble with allegations that the key promoters Kapil Wadhawan and Dheeraj Wadhawan (aka Baba) may have possibly siphoned over Rs 40,000 crores of the company’s funds by dubious and fraudulent means.

As of July 2019, the company owed Rs 83,873 crore to various banks, the National Housing Board, mutual funds, bondholders and fixed deposit investors.

In October 2019 the RBI superseded DHFL's board and appointed former banker R Subramaniakumar as the administrator. In November 2019 the government amended the Insolvency and Bankruptcy Code (IBC) and DHFL became the first company to be referred to NCLT by RBI under Section 227 of the IBC. Subramaniakumar was also retained as the resolution professional under IBC.

Latter investigations by multiple agencies and forensic audits have so far reported that both the Wadhawan brothers have indeed looted the company nearly to the tune of Rs 32,000 crore and more investigations are still undergoing.

Enforcement Directorate (ED) investigations has revealed that the Wadhawan brothers had opened a fictitious branch in Bandra which boasted of over two lakh bogus (dummy) homebuyers to siphon off Rs 12,000 crore, and they had diverted the money to around 80 shell construction companies.

The brothers were using different software that was customized to create bogus customers with fake details and then this data was entered into the company's official software system to show them as legitimate customers.