DHFL reports Rs 12,736 crore fraudulent transactions in Jan-March 2020-21
The distressed housing finance company DHFL has reported additional transaction amounting Rs 12,736 crore as fraudulent, undervalued and preferential in nature in fourth quarter of 2020-21, the audit report of the company revealed.
The company has made provisions as per National Housing Bank (NHB) and RBI guidelines on provisioning pertaining to fraud accounts.
While the company made profit in the fourth quarter, its overall finances look gloomy with net worth eroding to a negative Rs 20,600 crore on the back of an annual loss of Rs 15,051 crore in 2020-21.
DHFL, which is undergoing insolvency proceedings, posted a net profit of Rs 97 crore in the fourth quarter of 2020-21 (on a standalone basis), compared to Rs 7,635 crore loss in the same period previous year (2019-20).
The profit in the January-March quarter was largely on account of sharp decline in net loss due to fair value of securities held by the company. Net loss from fair value for the fourth quarter this year was Rs 1,504 crore compared to Rs 12,403 crore in the same period in the previous year.
The NBFC posted interest income of Rs 2,019 crore during the quarter, 15.6% lower than in same quarter previous year.
For the 2020-21, the company posted a net loss of Rs 15,051 crore compared to net loss of Rs 13,612 crore. Interest income during the year came down to Rs 8,719 crore from Rs 9,322 crore in 2019-20.
DHFL has not made any provision for interest on borrowings amounting to Rs. 1,912 crore and Rs 7,651 crore for the quarter and year-ended on 31 March 2021, respectively, due to the company’s current corporate insolvency resolution process.
Under the IBC, the treatment of creditors under the resolution plan is as per debts due as on the insolvency commencement date and therefore, no interest is accrued and payable after this date. Had the interest was accrued on borrowings and provided for, the profit for the quarter ended 31 March 2021 would have been lower by Rs 1,422 crore and loss for the year ended 31 March 2021 would have been higher by Rs 5,690 crore.
Due to annual loss of Rs 15,051 crore in 2020-21, the company’s Net Worth has eroded significantly to Rs -20,637 crore.
The total wholesale loan portfolio, including interest receivable aggregating Rs 54,249 crore (pursuant to classification of this portfolio to held-for-sale in the year ended 31 March 2019), has been fair valued at Rs 9,420 crore as on as at 31st March 2021, with resulting fair value loss aggregating Rs 44,828 crore. Out of this, fair value loss aggregating Rs 43,312 crore has been accounted up to 31 ecember,2020 and balance loss of Rs 1,516 crore has been charged to the statement of Profit and Loss for the quarter ended 31 March 2021.
