Dewan Housing slumps 17 percent after government launches probe

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Dewan Housing slumps 17 percent after government launches probe

Dewan Housing slumps 17 percent after government launches probe 1

A labourer carries an iron pipe at the construction site of a residential complex on the outskirts of Kolkata, October 5, 2018. REUTERS/Rupak De Chowdhuri/File Photo

NEW DELHI (Reuters) – Shares of Indian home loan provider Dewan Housing Finance Corp Ltd slumped 17 percent in early trade on Thursday, with sources saying the Indian government has launched a probe into allegations of financial mismanagement against the company.

India’s Ministry of Corporate Affairs will look into allegations against Dewan following a report by investigative media outlet Cobrapost, two government sources with direct knowledge of the matter told Reuters on Wednesday. The sources said on Thursday the probe has been launched.

The secretary of the ministry of corporate affairs did not immediately respond to an email seeking comment.

Cobrapost said on Tuesday Dewan diverted funds to shell companies to buy assets, and that firms linked to Dewan’s controlling shareholders – the Wadhawan group – made political donations beyond mandated levels.

Dewan, one of India’s largest housing finance companies, did not respond to a Reuters request for comment after the government initiated the probe. Earlier on Tuesday, it said the Cobrapost report was unfounded and malicious and that it had engaged lawyers to defend itself.

Dewan’s shares fell for the fourth straight day on Thursday, falling 17 percent to 134 rupees. It was the most heavily traded stock on India’s National Stock exchange in early trade.

($1 = 70.9975 Indian rupees)

Reporting by Sudarshan Varadhan and Aditya Kalra; Editing by Sanjeev Miglani; Editing by Muralikumar Anantharaman

Our Standards:The Thomson Reuters Trust Principles.

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

2019-02-03 10:54:53

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

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