The Supreme Court (SC) on Tuesday cancelled the bail granted to former Dewan Housing Finance Corporation Ltd (DHFL) promoter Dheeraj Wadhawan in a multi-crore bank loan fraud case. The court has directed him to surrender within two weeks. 

A Bench of Justices Sanjay Kumar and Satish Chandra Sharma passed the order after examining a report submitted by a medical board.

The SC’s ruling came in response to an appeal filed by the Central Bureau of Investigation (CBI), challenging the Delhi High Court’s order of September 9, 2024. The High Court had granted bail to Wadhawan on medical grounds, observing that he met the definition of a “sick person”. 

During the hearing, Additional Solicitor General SV Raju, appearing for the CBI, argued that Wadhawan did not suffer from any serious illness. He further said that huge sums of money had been siphoned off in the case and urged the court to cancel the bail.

Wadhawan and his brother Kapil Wadhawan, were arrested in July 2022. The CBI filed a chargesheet in October 2022, which was later taken on record by the court.

The case was triggered by a complaint from the Union Bank of India, which led to a first information report (FIR). The complaint alleged that DHFL, through its former Chairman Kapil Wadhawan, director Dheeraj Wadhawan, and others, conspired to cheat a group of 17 banks. The accused allegedly induced the banks to sanction loans worth ?42,871.42 crore, much of which was misappropriated.

DHFL, once a major housing finance company in India, is now at the centre of one of the country’s biggest financial frauds.

According to a KPMG audit covering 2016-2019, the company disbursed over ?29,000 crore to 66 entities linked to the Wadhawan brothers. These loans were allegedly processed without proper checks and lacked sufficient collateral.

Further investigations revealed that the Wadhawans created 87 shell companies to siphon off more than ?11,000 crore. These entities were only on paper and had no real business operations.

The scam also involved a fictitious "Bandra Branch" that existed only in DHFL’s internal software system. This fake branch was reportedly used to route money to these shell companies. The CBI claims that thousands of fake borrower accounts were created using real customer data. These accounts were used to borrow over ?14,000 crore and also to fraudulently claim ?1,880 crore in interest subsidies under the Pradhan Mantri Awas Yojana, a government housing scheme for the poor.