Sebi orders attachment of bank, demat accounts of DHFL’s ex-promoters in disclosure violation case

Markets regulator Sebi has ordered the attachment of bank accounts as well as shares and mutual fund holdings of Dheeraj Wadhawan and Kapil Wadhawan, the former promoters of Dewan Housing Finance Corp Ltd (DHFL), to recover dues totalling over Rs 22 lakh. This came after the brothers failed to pay the fine imposed on them by the Securities and Exchange Board of India (Sebi) in July last year in a case concerning the flouting of disclosure norms. In two separate attachment notices issued on Tuesday, the markets watchdog has ordered the attachment of bank, demat accounts, and mutual fund folios of the Wadhawans to recover the pending dues.

The pending dues of Rs 10.6 lakh each from Wadhawans comprise the initial penalty amount, interest, and recovery cost, it added. In July 2023, the regulator imposed a penalty of Rs 10 lakh each on Wadhawans, who were promoters of DHFL (now known as Piramal Finance), for flouting disclosure norms. Kapil Wadhawan was the Chairman and MD of DHFL, while Dheeraj Wadhawan was a non-executive director of the company. Both of them were on the board of DHFL.

The order came after Sebi investigated the transfer of shares held by DHFL in DHFL Pramerica Life Insurance (erstwhile DLF Pramerica Life Insurance) to its wholly owned subsidiary DHFL Investments and other related transactions.

The investigation period was from February to March 2017. Sebi observed that the brothers were responsible for providing inadequate information in the postal ballot notice by the firm.
As per the attachment notices, Sebi said there is sufficient reason to believe that the defaulter may dispose of the amounts in the bank accounts and securities in the demat accounts and “realisation of the amount due under the certificate would, in consequence, be delayed or obstructed”.

Accordingly, the regulator asked all banks, depositories, and mutual funds not to allow any debit from the account. However, credits have been permitted. In January, Sebi sent demand notices to Dheeraj and Kapil asking them to pay Rs 10.6 lakh each in the case. Also, the regulator warned them of arrest and attachment of assets as well as bank accounts if they fail to make the payment within 15 days.