Scandalous and Nefarious

- February 06, 2020

After seeing so much love and support for my previous blog posts, I Rohit kanodia decided to come up with a new post on my blog. So another day turned up and another scam took place in the heart of the nation (New Delhi), Indian Banks and Non banking financial corporations (NBFC) act as a backbone of the Indian economy and act as lenders of the last resort for all the civilians who are willing to finance the funds to buy a house or any of the necessities. But what if these NBFC's play with the sentiments of the people and do unethical practices to fill their pockets.

News dated on 30/01/2020 came from New Delhi where Dewan Housing Finance Corporation Limited diverted Rs. 12,773 crores by creating one lakh 'fictitious' customers. The company diverted Rs. 12,773 crores towards a host of other companies reportedly connected with its promoters. DHFL managed this by accounting these diversions as loans to nearly one lakh fictitious customers. The corrupt practice came to Enforcement Director's notice when the agency inspected the books of accounts of DHFL pertaining to Rs. 2,186 crore loan given to five companies linked with Sunblink real estate. ED found that Sunblink real estate bought three worli-based properties allegedly belonging to late gangster Iqbal Memon Alias Iqbal Mirchi for Rs. 225 crore. Kapil Wadhawan, the promoter of DHFL and Sunblink Real estate was arrested for alleged money laundering linked to properties belonging to Mirchi. Wadhawan is claimed to have played a crucial role in diverting funds from DHFL to shell companies, which later got amalgamated with Sunblink Real.

so what we mug up with the above news, is this ethical for a non-banking institution to create those unreal customers and help its subsidiaries to raise loans from them?... Is this ethical for any company to lock a deal with a gangster to gain more profit?... Is it ethical to do money laundering?... Exactly NO. A parent company as well as its subsidiaries, its promoters and board of directors should be ethical in doing any practices and remains transparent with their proceedings. Creating these unreal or fictitious customers accounts isn't a ethical way of doing the business. A most trusted and valued company at one point of time (DHFL), was accounced as bankrupt with over 88,300 crores dues to its investors and the bank.

My question to you is "Do you think these unethical deeds by DHFL and its promoters are the main cause of the losses they faced in recent past?"... I generally feel yes, this is the main cause for the losses incurred by the DHFL, if they provide utmost satisfaction to its customers, to its investors, to the people to whom they borrow funds and most importantly follow all the code of ethics and conducts, then they will automatically turn their business in profits... There's only one thing that differentiate a Great enterprise and a substandard enterprise and we can say that one thing is the "Ethics".

Thank You