Unions seek 'forensic audit' of UTI-AMC's 'Rs 2,000-cr exposure' in DHFL scam

In a new dimension to the Dewan Housing Finance Ltd. (DHFL) fraud, an apex banking union and the staff of the UTI-AMC have demanded a "forensic audit" into their company's purported "Rs 2000-crore exposure" into the scam-hit group of Dheeraj R. Wadhawan and Kapil R. Wadhawan.

The staffers' groups are: the Mumbai-based All India UTI-AMC Officers' Association (AIUTI-AMCOA) and the external but influential Chennai-based All India Bank Officers Association (AIBOA).

The AIUTI-AMCOA and AIBOA have shot off separate letters to various entities while a top leader has sought Central government's directions to the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and Income Tax (IT) Department to probe the matter thoroughly as it involved "huge public funds".

AIUTI-AMCOA Chairman Vishwas Utagi and General Secretary Pawan K. Abrol have written to the Joint Secretary, Department of Investment & Public Asset Management (DIPAM), Ministry of Finance and the SEBI Chairman on the losses allegedly suffered by the UTI Treasury Advantage Fund in the DHFL imbroglio.

On its two letters (November 2019 and January 2020), Utagi and Abrol said that the UTI-AMC gave a vague reply (November 25, 2019) that the "UTI Mutual Fund (UTI MF) had taken a prudent exposure of 3.5 per cent-4 per cent in UTI-TAF Scheme when DHFL was AAA rated".

Abrol said this implied that there were no subsequent investment/s by UTI-AMC, particularly after September 2018 when DSP Mutual Fund sold off their exposure to the Wadhawan brothers' DHFL securities.

However, ex-officials of UTI-MF - who were privy to sensitive information - later revealed that the UTI-AMC was quietly investing in the DHFL Securities to bail out redemption of earlier securities, even after the scam tumbled out and leading to the arrest of the Wadhawans, said Utagi.

"When the entire MF industry had exited DHFL Securities, the UTI-AMC's exposure had grown to a staggering Rs 2,000-crore. The UTI-AMC Director and CEO Imtiazur Rahman must internally probe to find out who authorised such illegal investments, with or without his knowledge, make it public and hand over the matter to the CBI-ED for further investigations," Utagi demanded.

In a separate missive to T.K. Pandey, Secretary, DIPAM, the AIBOA General Secretary S. Nagarajan has called for a proper "forensic audit" into the UTI-AMC's investments in DHFL Securities.

"As we live in a world of transparency and the Government at the Centre is pursuing the 'zero tolerance' in all matters, we request you to initiate the 'forensic audit' of investments made by the UTI-AMC Ltd," Nagarajan urged Pandey.

Utagi and Abrol pointed out that since the DHFL fiasco is under investigation by various probe agencies, "the AIUTI-AMCOA seeks a 'forensic audit' of each and every investment transaction of UTI MF to verify the authenticity of the UTI-AMC's claims".

The DHFL was founded in April 1984 by the late Rajesh Kumar Wadhawan and later headed by Kapil R. Wadhawan as the Chairman-cum-Managing Director and his brother Dheeraj R. Wadhawan as a Director.

After the frauds erupted in 2019, the Reserve Bank of India (RBI) in November 2019 sacked the DHFL Board and later Kapil Wadhawan was arrested by the ED in connection with the fake-loans and money-laundering scams of over Rs 21,000-crore involving several other companies, banks and financial institutions.

The trio of Nagarajan, Abrol and Utagi said the Centre and SEBI, as well as the central investigating agencies must "immediately act" in the larger national interest as public funds are at stake and the truth must emerge.