CBI finds DHFL paid a ₹17cr commission to controversial businessman Jitu Navlani

In his statement to the CBI, Srinivasan said DHFL paid a nominal commission at the rate of 0.5% to the commercial banking company’s direct selling agents for sourcing retail loans.

In the course of its investigation the Central Bureau of Investigation has found that Dewan Housing Finance Corporation Limited (DHFL), deviating from its usual practise, paid controversial Mumbai businessman Jitu Navlani a commission of ₹17 crore.

The beleaguered DHFL paid the money “to bribe government officers to evade enquiries”, the Central Bureau of Investigation (CBI) has found in its investigation into the Yes Bank-DHFL fraud case. (REUTERS)

Navlani, who runs a pub in south Mumbai called Dirty Buns, is allegedly close to former Mumbai police commissioner Parambir Singh, and has been accused by Shiv Sena MP Sanjay Raut of running an extortion racket using his connections with Enforcement Directorate officers. Navlani has been booked by the Maharashtra anti-corruption bureau (ACB) for approaching businessmen and promising them reprieve from any action by the ED in lieu of money.

In its charge sheet filed on June 25 in the DHFL-Yes Bank fraud, CBI quotes the testimony of the executive assistant to DHFL CMD Kapil Wadhawan to say that Wadhawan paid ₹17 crore to Jitu Navlani for a loan sanctioned by DHFL to M/s Bombay Dying as commission. In fact, Govindan Srinivasan, Wadhawan’s EA from 2013 to 2019, told the CBI that the money was allegedly paid to stave off central agencies from investigating DHFL.

“I say that hundreds of projects loans were sanctioned and disbursed by DHFL during the 06 years of my service from 2013 to 2019 in DHFL and other than the three instances in respect of companies of Avinash Bhosale and the fourth instance of payment of commission to Jitu Navlani for the loan provided to Bombay Dying, I did not come across a single instance where commissions were paid to agents or middlemen for project finance loans from any external agency,” Srinivasan told CBI.

Srinivasan’s statement forms part of third charge-sheet in the case that CBI had filed against Mumbai builder Sanjay Chhabariaa, whose firms had received ₹ 2,000 from DHFL.

Srinivasan’s statement to the CBI gains significance because earlier this year, on March 3, Shiv Sena spokesman and MP Sanjay Raut had claimed in a press briefing that he had details of 70 bank transactions amounting to ₹58.93 crore made by multiple builders and business establishments in Mumbai to Jitu Navlani. Raut further alleged that Navlani was extorting this money on behalf of certain officers in the Enforcement Directorate. Following Raut’s press briefing, a Shiv Sena worker Arvind Bhosle had registered an FIR against Navlani with the ACB.

ED then subsequently moved the Bombay high court for quashing the ACB FIR, though no specific officer is named in the case. ED’s petition is pending adjudication before the HC.

In its investigation the Enforcement Directorate links Sanjay Chhabariaa, Kapil Wadhawan and Yes Bank promoter Rana Kapoor. The investigation says that between April and June of 2018 Yes Bank invested ₹3,983 crore in short term non-convertible debentures or “Masala Bonds” of DHFL. The bank subsequently also sanctioned a term loan of ₹750 crore to a DHFL group firm. In return, the agencies claim, the then Yes Bank MD and CEO Rana Kapoor received a kick-back of ₹600 crore from DHFL in the form of a loan to his family firm, Do It Urban Ventures (India) Private Limited.

The Enforcement Directorate on July 6 had claimed that immediately after the transfer of ₹ 2,700 crore by Yes Bank to DHFL in the garb of subscription for non-convertible debentures in the first week of June 2018, DHFL sanctioned two loans of ₹ 1,100 crore and ₹900 crore respectively to two of Chhabariaa’s companies - M/s Radius Estate Projects Pvt Ltd. (REPPL) and Sumer Radius Realty Pvt. Ltd. (SRPPL) respectively.