HDFC slips on report of fund diversion case

The SFIO has recently examined and recorded the statement of a top HDFC executive.

Feb 07, 2019 05:02 IST India Infoline News Service

Shares of Housing Development Finance Corporation (HDFC) are down 0.5% on Thursday after a media report stated that the Serious Fraud Investigation Office (SFIO) is probing the role of the company in connection with its ongoing investigations into alleged fund diversion and mismanagement by IL&FS Ltd and a few of its subsidiaries.

As per The Indian Express report, the SFIO has recently examined and recorded the statement of a top HDFC executive. It may also examine former nominee directors appointed by HDFC on the board of IL&FS.

The company has 9.2% stake in IL&FS. An interim report of the SFIO alleged HDFC indulged in accommodative lending to IL&FS Employee Welfare Trust (EWT), the media report said.

Accordingly, the report has referred to a transaction during 2013-14 between HDFC and IL&FS EWT where the trust acquired 8 lakh shares of IL&FS Ltd from HDFC at Rs1,184.50/share.

The SFIO claimed that these shares were acquired at a high price without any valuation at a time when the trust was suffering from fund crunch as it is not able to generate enough cash flows to service its own debt and was taking new debt from the group companies to service the existing obligations.

Housing Development Finance Corporation Ltd's share price is currently at Rs1,978, down by Rs9.5 or 0.48%, from its previous close of Rs1,987.50 on the BSE.
The scrip opened at Rs1,987.15 and has touched a high and low of Rs1,990.85 and Rs1,971.75, respectively. So far, 7,45,436 (NSE+BSE) shares have been traded on the counter. The current market cap of the company is Rs3,41,744.91cr.

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