The Reserve Bank of India has dismantled the Board of fraud-struck Dewan Housing Finance Ltd due to governance concerns and defaults by DHFL in meeting various payment commitments, the regulator said in administrator notification on Wednesday.
Subramaniakumar, ex-MD and CEO of Indian Overseas Bank has now been appointed as the administrator.
“In exercise of the powers conferred under Section 45-IE (I) of the Reserve Bank of India Act, 1934, the Reserve Bank has today superseded the Board of Directors of Dewan Housing Finance Corporation Limited (DHFL) owing to governance concerns and defaults by DHFL in meeting various payment obligations,” the RBI said.
“The Reserve Bank also intends to shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 and would also apply to the NCLT for appointing the Administrator as the Insolvency Resolution Professional,” it added.
Non-bank financiers are facing major liquidity issues from past one year due to default made by the construction lender IL&FS. DHFL is struggling with serious fraud allegations. KPMG in its forensic audit report has revealed a Rs 20,000 crore discrepancy in the lender’s books of accounts.