Closely guarded mechanism 'Bandra Book' used to divert Rs 11,549 crore: ED

Indian Express

29-05-2025

IN ITS latest chargesheet in the Dewan Housing Finance Limited (DHFL) loan diversion case, the Enforcement Directorate (ED) has detailed how a closely guarded 'Bandra Book' mechanism using one computer with an old software, through which Rs 11,549 crore, part of loans given by banks were allegedly diverted.
The ED filed its chargesheet (prosecution complaint) against 17, including DHFL directors Kapil and Dheeraj Wadhawan, and companies linked to them in connection with the Rs 42,871.42 crore loan given to them by a consortium of banks in 2010. The ED has also seized properties worth Rs 70.39 crore in the case, including 25 paintings by prominent artists and one sculpture, a helicopter, and two watches valued at Rs 5 crore, claiming that loan amount was diverted towards buying these.
Among the evidence cited by the ED is that of the creation of Bandra Book, a mechanism involving one computer with no LAN connectivity to divert funds. The ED has said that DHFL, which was incorporated in 1984, went for digitisation of its records in 1993. At that time, there were around 10-12 branches across India and the digitisation involved computerising all borrower and loan accounts. The IT team developed a software for it, through which each branch installed the data manually. Since there was no internet connection at that time, the branches were not interconnected. After a few years, the system was upgraded. The Bandra branch had closed in 2004 but the accused kept it alive using the old system. The ED has alleged that the branch continued to be used for requesting loans and receiving funds, which were then used for personal interests. The older software generated several entries of smaller amounts whenever a big amount of loan was requested. The agency has claimed that this was operated from a computer which had no LAN connectivity, with the information limited to only a few employees, including an IT head.
'In this way, the Wadhawans of DHFL had illegally and fraudulently diverted approximately Rs 11549 from DHFL by falsifying its books of account and for inflating its retail/home loan book to their 87 controlled entities in the name of 2.60 lakh fake/non-existent individuals…during the year 2006 to 2017,' the ED chargesheet has said. The ED has claimed that audit reports too were compromised to enable these diversions.
About the purchase of paintings, the ED has claimed that in 2017 and 2018, Kapil had participated in auctions and purchased 13 high value paintings and one sculpture from an auction house, in the name of his beneficially owned company, funds for which were diverted from the loans. The paintings include works by artists F N Souza, M F Hussain, S H Raza, Tyeb Mehta and others. The ED alleged that while the paintings cost a total of Rs 63.44 crore and Rs 40.07 crore were paid through the loan amounts. The agency also alleged that in 2019-2020, the Wadhawan family had purchased diamond jewellery worth Rs 175.29 crore, part of which was also paid from the loan amount.
Special Judge A C Daga in an order on May 2 issued notices to all the 17 accused noting that there is a prima facie case to show that proceeds of crime were diverted. 'The DHFL was in the business of housing finance. They used to raise funds from banks, institutions, and disburse it to individuals. The employees and the accused helped the DHFL in preparing inflated books of accounts by way of showing thousands of fake home loans by inducing a consortium of banks,' the court said.