Indiabulls gets rammed by Swamy
Indiabulls Housing Finance, Indiabulls Real Estate and Lakshmi Vilas Bank are among the top three losers on the BSE since opening bell. Indiabulls Housing stock price fell down 9% to Rs.567; Indiabulls Real going down over 8.5% to Rs.96.80 and LVB sliding 10% down to Rs.54.50, precipitously close to its 52-week low of Rs.53.90.
The reason for the group stocks to fall? Rajya Sabha Member Subramanian Swamy has written a letter, alleging that the group has embezzled more than Rs one lakh crore from the National Housing Bank (NHB).
In the letter dated, 28th June, Swamy said, “As per credible information that I have, and after perusal of many available documents, I wish to inform you that India Bulls Housing Finance Limited and its associates which many Congress leaders eg: P Chidambaram and BS Hooda have patronised, is heading now for a financial collapse and bankruptcy, resulting large corruption issues in real estate sector, banking, stock markets and loss of more than Rs.One lakh crores of funds of public and of National Housing Bank.”
Explaining the modus operandi, he wrote, “India Bulls Housing Finance Limited and its related firms formed more than 100s of shell real estate firms to take loans from NHB and re-allot or siphon it off to many real estate firms in Maharashtra, Delhi, Gurugram, Bangalore and Chennai in the range of Rs.30 crores to Rs.1000 crores. After allotting these loans to other friendly real estate firms India Bulls accepted these amounts back as an investment to them! Some of such dubious loans were just book entries. That is, nothing but money laundering and round-tripping.”
Swamy has demanded a probe by Special Investigation Team (SIT) and Special Audit on the loans granted by NHB for the past 14 years.
Indiabulls issued a clarification, stating categorically that there was no truth in Swami’s allegations.
The company has explained:
· Loans outstanding as on date from NHB to Indiabulls Housing is zero.
· Indiabulls Housing, in its history, has never taken any loan or refinancing facility from NHB.
· The total loan book of Indiabulls Housing is approx. ? 87,000 Crores.
The details of companies that are availing refinance facilities from NHB is a matter of record at NHB: https://nhb.org.in/financing_post/refinance-to-housing-finance-companies/