MUMBAI/ NEW DELHI: Former CMD of Dewan Housing Finance Corporation Ltd ( DHFL Kapil Wadhawan had allegedly siphoned off Rs 12,773 crore bank money with the help of 79 shadow entities and one lakh fictitious customers, alleged the Enforcement Directorate (ED) on Wednesday.A few city-based builders are under the ED scanner in the case as part of the money was allegedly diverted to them through fictitious transactions. “The malaise is running deep and rough estimate gives (sic) such illegal diversions of funds to 79 such shadowy entities without any sanction or paperwork in garb of retail loans to approximately one lakh fictitious individual customers to be in access of Rs 12,773 crore in 2015,” the ED alleged in its plea before the special court seeking seven-day extension of Wadhawan’s custody.ED officials are trying to trace the money trail by investigating details of the shadow entities. The entities existed only on paper and were allegedly linked to the promoters, the ED said. The directorate produced Wadhawan before a special court on Wednesday, and his custody was extended till Friday.The defence told the court that Wadhawan was suspected to be suffering from swine flu. The ED had arrested Wadhawan on Monday in the money laundering case it is investigating against Iqbal Memon alias Mirchi and for siphoning off funds. The ED alleged part of the siphoned-off money was also used to pay Mirchi for purchasing his three buildings at Worli.During the remand hearing on Wednesday, Wadhawan’s advocate Amit Desai told the court that the ED is investigating him for siphoning off DHFL funds, and this was not connected with the money laundering case involving Mirchi.Desai said the funds which ED claimed had left DHFL did not go into any Mirchi matter. “It has nothing to do with Iqbal Mirchi ,” Desai said. He also submitted the money was invested in various assets, which have now become security. “Over the last one and a half years, Wadhawan has made sure all those assets where the funds were being utilised are all the security of DHFL under the supervision of banks who were participating in the activities of discharging the liability. These assets are now available for the benefit of creditors of DHFL,” he said. Desai said that among the assets are also large lands outside the city under development, and their term sheets show that if fully developed, their value would be in excess of Rs 30,000 crore. “This is far more than the claims that are outstanding today,” Desai said.DHFL owes Rs 83,873 crore to banks, mutual funds and investors and is the first non-banking finance company (NBFC) to be referred to the bankruptcy court by the Reserve Bank of India (RBI) last November.But the ED insisted that siphoning off funds was connected with the money laundering case. They alleged part of the siphoned-off fund was used to pay Mirchi and the rest was laundered. The remand plea submitted and argued by ED special counsel Hiten Venegaonkar and Sunil Gonsalves said the investigating agency had recorded statements of several present and former senior officials of DHFL. The statements of persons disclosed a startling fact about the state of affairs and gory saga of siphoning, money laundering and other serious offences, the directorate said.The ED told the court that Wadhawan was instrumental in the working of DHFL group decisions to grant loans to these companies and he was not revealing anything during interrogation. It also informed the court they were searching some premises from Wednesday noon and had collected digital evidences which they needed to confront Wadhawan with.The ED said, “It appears to be a scam of wider ramifications wherein more than Rs12,700 crore has been diverted illegally and Wadhawan is a prime conspirator.”It stated that DHFL had given Rs 50 crore loan to Sunblink to purchase Mirchi’s property though there was no property in the name of the company. Apart from that, it said DHFL diverted a loan amounting to Rs 1,500 crore (with interest it’s Rs 2,186 crore) to five shell companies in 2011-12 “without any legal authority and under the garb of housing loan etc to individual customers”. While clearing loans to the five entities, procedure was not followed as security for the loan was not created and the issue was not cleared by the board’s finance committee but signed only by the promoters, Dheeraj and Kapil Wadhawan.Later, the five shell companies were merged with Sunblink to cover alleged diversions of loans acquired from DHFL. The ED said later Sunblink created a new mortgage on the Worli buildings showing its worth as Rs 2,186 crore, though Sunblink had purchased the property for Rs 111 crore. The ED claimed Wadhawan’s brother Dheeraj aka Baba Dewan paid Rs 154 crore directly to Mirchi abroad through one of his companies in Dubai. The ED suspects Wadhawan paid more money to Mirchi for redeveloping the Worli buildings. The ED said Sunblink is a front company of Wadhawan, where his relative Sunny Bhatija is a director.The ED has filed a criminal case against Mirchi, his family members and others to probe money laundering charges for alleged illegal dealings in purchase and sale of costly real estate assets in Mumbai. Mirchi, who died in 2013 in London, was said to be the right-hand man of global terrorist Dawood Ibrahim.