Dewan Housing Finance Limited


(dumboinvestor) #636

As long as siphoning of cash is within their power and within the realms of the law nothing can be done. Like in the case of LEEL. All of them must be consulting with their lawyers before doing such things. It is mostly likely legal but obviously highly immoral and unethical.
they have made themselves a killing. The winners of the epic bull run of 2016-2018=Wadhawan group
Pulled a fast one over everyone including big investors. No wonder cos like nestle, HDFC Bank, Gruh get such fancy valuations. Corp governance is the most important thing in Indian markets.


(zulfiqar) #637

Once a chor always a chor that is y pe should be looked in conjecture growth and also mgt pedegree


(rkatikam) #638

Sir I don’t know if law will catch up or not . Even if it were to after how many years? Recently an auditor was fined after 20 years.
Also in this case they will mostly declare the loans given to the promoter entities or their benamis as NPAs very soon. So it will all be within the proper legal framework.
Now what will be interesting is who will be buying a company like this and at what valuations. What would that investor be looking for in the business (other than financials)?


#639

IMO, all this smokescreen of stake sale is to delay the inevitable. They are just buying time before a big bust when they start defaulting. One needs to discount that they are politically connected with erstwhile rulers of their home state. They might want to wait out till May 2019 for any potential help. Can any investor who was deeply invested here describe its competitive advantage? Looking back, the only convincing argument I heard that it is trading cheap and promoters are “becoming” investor friendly. This is despite the fact they short changed minorities in their stake sale in insurance venture. Offlate loan growth was going bombastic as builders were crying for funds. Despite of all these it generated princely 1% RoA. This was the single biggest factor that kept me away as margin of safety was too small. Nobody can claim that there were no warning signs.


(dumboinvestor) #640

@sumi00 as much as I condone the concept of risky propositions/investments when there is always a quality expensive company that can do 12% cagr I must defend the investors in DHFL in this case.
There were no signs.
They were cheap for the type of growth that they were showing. Gruh at 10x made them look even cheaper
Promoters had shown that they were trying to clean up. It was quite evident from the tone surrounding the company and the mgmt itself.
Yes there was no moat. But is there a moat for wholesale lenders anyway? Everyone knew there was no moat. The idea was opportunity size and growth. It does not help when people like kedia come in and say lakh crore ki kahani in housing finance sector.
DHFL was a perfect bull market story. Vakrangee got caught slightly too early but DHFL seem to have got it just right. Post election all will be forgotten and they will happily exit to a PEL or something. There is definately some value in terms of distribution and client base/data. Plus DHFL have some sort of a brand recall in the country. It is only investors who are aware of the fraud we must remember this that the public and DHFL customers perhaps have no clue that wadhawan group runs the company.
I must defend the investors in DHFL. It was a genuine mistake and an excusable one. But the markets are down and you have a chance to make up the lost capital.


(Harsh04) #641

Assuming they siphoned of 31000cr and this will subsequently be converted to NPA, i still have the following doubts :

  1. We are talking about 30% of their AUM turning into NPA. can such a humungous fraud happen without any missed payments or defaults of any kind ?
    if this money was siphoned off, where is the loan repayment money coming from ?
  2. if 30% of the AUM is ought to be NPA, how did such large siphoning off go unnoticed with Auditors, SEBI etc ?
  3. Mgmt clarified in one of the concalls that the project loans were given to SPV’s. Can someone clarify here about the SPV’s and their working relationship with the parent company because i have a doubt that these SPV’s are being labelled as Shell companies.
  4. No action or any sort of follow up by SEBI, MCA post the cobra post expose. why ?
  5. Yes, as someone said before, the point now is on the quantum of the fraud weather it is 31000cr or 31cr, but i quite believe that corporate governance in India is a myriad shades of grey rather than just black and white.

(Bharat) #642

Hi ,
There was a warning by one of the Gems of valuepikr way back in 2012. Though it gave some 4-5X returns from there but eventually fell now to the same levels of 2012.

There was also some accusations on Company in Oct 2017 regarding Benami Transactions. It was too discussed here but then management issued a clarification that it was a general tax inquiry by the department. Though they did mention that they have given loans to the mentioned entity which was formed recently. It was a period of bull run and thus such stories are forgotten easily in the midst of few UCs…

I believe , the forum is a great initial source of understanding most of the Businesses. One can know important events of last 5-6 Years at a single place as many things are widely been discussed in the forum from time to time. It also helps in understanding lots of different different viewpoints of members and improve our competence. It truly helps in separating wheat from the chaff.

I think , before buying any business , complete reading of the specific company thread will be extremely helpful especially for new investors. Also rather than following or cloning widely discussed market Superstars , better to follow our great Gems of valuepikr.

Regards


(sougataG) #643

Certificate regarding payment of interest amount in respect of
Non-Convertible Debentures as per Regulation 57(1) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015


(varunm2112) #644

Institutions held 2.2cr shares of DHFL in August, now it has come down to mere 6k shares.


(Karanops) #645

Winder who bought these shares. Entire lot is absorbed and it did not collapse like the vakrangees and manpasand…may be it’s a positive.

There are still buyers of this business.

Not invested


(varunm2112) #646

Finally the audit report for cobrapost allegations

056dd43c-0af4-47b9-a4d1-cc0ad949a91a(1).pdf (322.0 KB)


(Gary) #647

It doesn’t answer many questions that cobrapost raised like common address and directors for many of these companies to whom loans were issued. Doesn’t address question on how such large loans were given to companies with such poor net worth.

And the tone of “investigation” is of an explanatory note intended to satisfy read rather than actually find answers.

If this investigation was paid for by DHFL, then I’m not surprised.


(esoteric) #648

#Gary24- I think the auditor has staked his reputation to give this report.I am sure there will be a rejoinder from Cobrapost which will cause more damage. Despite attempting to camouflage the many wrongs,the auditor has been forced to accept misdemeanour like buying shares of company, not creating charge etc.The last word is not yet said.


(Puneet Nandwani) #649

To me, real action will be taken by stake buyer. He is putting money on the table. This action may say that there are issues but not a permanent damage.( if we don’t see stake sale in 90 days I.e in next 40 days then assume few due diligence has happened and buyer is not comfortable)


(rkatikam) #650

Would be interesting to see the forensic audit findings by BoB


(yourraj) #651

update regarding rating
http://www.careratings.com/upload/CompanyFiles/PR/Dewan%20Housing%20Finance%20Corporation%20Ltd.-03-06-2019.pdf


(sougataG) #652

Update on rating by BrickWork Ratings


(magicon) #654

NHB is given clean chit to dhfl, not found major deviation , going to submit detail report in few week.


(rkatikam) #655

DHFL themselves have clarified that there was no clean chit


(Manish M) #656

Another director has resigned -
https://www.bseindia.com/corporates/anndet_new.aspx?newsid=c7019969-ce37-4d72-a547-cb490f4843bb