PIL against Indiabulls Housing for 'violations, siphoning'

In a major setback for Indibulls Housing Finance Ltd (IBHFL), a public interest litigation (PIL) has been filed against the company in the Delhi High Court for alleged irregularities, violations and siphoning of funds.

The High Court has 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 next hearing will be on December 15. The PIL alleged that IBHFL 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 MCA, 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 IBHFL," the PIL said.

Stocks of Indiabull Real Estate slumped 9.58 per cent to close at Rs 50.95 during the day. Many Indiabulls promoter group companies have been found to have been indulging in various malpractices, such as roundtripping, kickbacks and tax evasion, involving several thousand crores of rupees.

( With inputs from IANS )