Description

SEBI issues final order against six individuals including Kapil and Dheeraj Wadhawan for alleged fund siphoning and misrepresentation of DHFL's financial statements.

Summary

SEBI has issued a final order under various sections of SEBI Act 1992 and Securities Contracts Regulation Act 1956 against six individuals connected to Dewan Housing Finance Corporation Limited (DHFL). The order relates to alleged fund siphoning to promoter-related entities and misrepresentation of financial statements.

Key Points

  • Six noticees include Mr. Kapil Wadhawan, Mr. Dheeraj Wadhawan, Mr. Rakesh Wadhawan, Mr. Sarang Wadhawan, Mr. Harshil Mehta, and Mr. Santosh Sharma
  • Allegations center on diversion of funds through “Bandra Book Entities (BBEs)” connected to DHFL promoters
  • Case involves misstatement of financial statements and violation of related party transaction regulations
  • Proceedings include cross-examination opportunities and detailed investigation into accounting practices
  • Order addresses preliminary objections raised by noticees regarding procedural aspects

Regulatory Changes

This enforcement action reinforces SEBI’s oversight of related party transactions and financial disclosure requirements for listed entities, particularly housing finance companies.

Compliance Requirements

  • Listed companies must ensure accurate disclosure of related party transactions
  • Proper approval processes must be followed for loans to connected entities
  • Financial statements must accurately reflect company’s financial position
  • Promoters and key management personnel must comply with securities regulations

Important Dates

  • Order reference: WTM/AN/CFID/CFID/31591/2025-26
  • Published: August 12, 2025

Impact Assessment

This high-profile enforcement action against DHFL promoters sends a strong message about SEBI’s commitment to investigating financial fraud and protecting investor interests. The case highlights systemic issues in the housing finance sector and reinforces the importance of robust corporate governance practices.

Impact Justification

Major SEBI enforcement action against DHFL promoters involving significant financial fraud and investor deception