Shares of the Gurugram-based mortgage lender - Indiabulls Housing Finance - slumped as much as 38.34 per cent, its biggest intraday fall since listing in 2013, to Rs 240.15 on the BSE, also its lowest level since April 2014. The Delhi High Court accepted a public interest litigation filed against the company for alleged irregularities, violations and siphoning of funds on Friday. Meanwhile, analysts also said that its proposed merger with Lakshmi Vilas Bank (LVB) is also stuck in limbo after the Reserve Bank of India placed LVB under its Prompt Corrective Action (PCA) framework.
The Reserve Bank of India (RBI) initiated prompt corrective action (PCA) proceedings against Lakshmi Vilas Bank, a day after the private lender said that the Economic Offences Wing of Delhi Police is probing allegations of cheating and criminal breach of trust against its directors.
Meanwhile, the High Court issued a notice to the company, Ministry of Corporate Affairs (MCA), Reserve Bank of India (RBI) and the Securities and Exchanges Board of India (SEBI) and the next hearing will be on December 15.
The company, however, in a statement, denied any wrongdoing, saying it has filed an application before the High Court for perjury and misrepresentation against senior advocate Prashant Bhushan.
The PIL alleged that Indiabulls Housing Finance indulged in financial engineering and advanced dubious loans to companies which routed the money back to the accounts of the companies owned by Indiabulls promoters.
"IBHFL through its promoters and their various group companies and subsidiary companies has been advancing dubious loans to companies owned by large corporate groups which in turn have been routing the money back to the accounts of companies owned by the promoters of Indiabulls, so as to increase their personal wealth," said the PIL.
The petitioner also sought directions for the Ministry of Corporate Affairs, Registrar of Companies (ROC), Serious Fraud Investigation Office (SFIO), National Housing Bank (NHB), RBI, SEBI to take action against IBHFL and its promoters and owners.
"As of date, there has been complete inaction of the respondent authorities against Indiabulls Housing Finance," the PIL said.
In its statement, Indiabulls Housing Finance said: "The company has filed an application before the Delhi High Court for perjury and misrepresentation under oath against Prashant Bhushan for willfully filing a PIL full of false and incorrect information and thereby causing wilful loss of reputation to the company".
As of 1:32 pm, Indiabulls Housing Finance traded 30 per cent lower at Rs 273.90, underperforming the Nifty which was down 0.8 per cent
(With inputs from agencies)
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