The Dewan Housing Finance Ltd (DHFL) share price fell in early trade today after investigative news portal Cobrapost claimed that the primary promoters of the housing finance firm siphoned off more than Rs 31,000 crore of public money in one of the biggest financial scams ever. The alleged scam was pulled off through grants of loans and advances to shell companies. Money was also allegedly routed through dubious companies and parked outside India to acquire assets, Cobrapost claimed.

Meanwhile, DHFL has dismissed Cobrapost's allegations as "mischievous misadventure" done with a mala fide intent.

The DHFL share opened 7.73% or 13.15 points lower at 156.90 on the BSE. The DHFL share price touched an intra day low of 153.50, down 9.73% on the BSE.

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The midcap stock closed 8.01% or 14.80 points lower at 170.05 level on the BSE yesterday. DHFL share price continued to fall Tuesday, slumping over 8 per cent after the company reported a 36.7 per cent decline in net profit for the third quarter. During the day, it tanked 11 per cent to Rs 164.50. Five of six brokerages rate the stock "buy" or 'outperform' and one "hold", according to analysts' recommendations tracked by Reuters.

The DHFL share is trading below its 50-day and 200-day moving average of 222.98 and 372.86. The DHFL share price has been falling for the last two days and is down 18.71% during the period. It has lost 71.49% during the last one year and 31.825 since the beginning of this year.

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The portal has explained the 'anatomy' of the alleged scam saying it was pulled off mainly by "sanctioning and disbursing astronomical amounts" in secured and unsecured loans to dubious shell companies related to DHFL's own primary stakeholders Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan through their proxies and associates. The funds were allegedly passed on to companies controlled by the Wadhawans. The portal claimed the money was used to buy shares and private assets in India and abroad, including in countries like UK, Dubai, Sri Lanka and Mauritius. Cobrapost claimed that the private assets acquired by the Wadhawans and their associates were completely ring-fenced from any recovery process and that the public sector banks would be the big losers.

"Thus, the only losers in the process would be the public sector banks, such as State Bank of India and Bank of Baroda, with an exposure of over Rs 11,000 crore and Rs 4,000 crore, respectively, foreign banks and shareholders from among the public or investors of DHFL."

Reacting to the allegations, the firm on Tuesday said DHFL as a responsible corporate has met all its obligations to the lenders and has paid back to them in excess of Rs 17,000 crore in the last three months. DHFL has a strong corporate governance regime and has received AM credit rating from leading credit agencies. The company is fully tax compliant and its books are audited by global auditors.

"DHFL today received an email at 8.44 a.m. in the morning, with a follow-up reminder one hour later, seeking answers to 64 questions from Cobra Post, many of which were laced with political innuendos. We are shocked and surprised to receive this inquiry this morning, although Cobra Post had announced its press conference last Friday, i.e. 25 January 2019, to disclose an alleged financial scam. One would have expected as a responsible media house CobraPost would have asked these questions during their investigations and not on the day of the press conference," DHFLS said.

It added: "Their entire approach raises serious concerns about the motivation of this so-called expose. It is necessary in public interest that if they believed in the genuineness of their issues to have given DHFL an opportunity to explain the facts that are in any case available in the public domain."

Edited by Aseem Thapliyal