June 11, 2019 / 2:12 PM / 14 days ago

Indiabulls Housing Finance slumps even as it rejects fraud allegations

MUMBAI, June 11 (Reuters) - Shares in Indiabulls Housing Finance Ltd plummeted as much as 8.8% on Tuesday even as the mortgage lender and its top management moved to quash allegations of financial misconduct and money laundering within the company.

A criminal writ petition filed on Monday in India’s Supreme Court alleged that about 980 billion rupees ($14 billion) had been siphoned out of the company by senior officials using a web of shell companies.

The housing finance company on Monday dismissed the allegations as “bizarre”, noting that total loans on its books stood at just 900 billion rupees.

Indiabulls said blackmailers were trying to extort money from the company, and had threatened to complain to various government departments if their demands were not met. It said the company had refused to succumb to the pressure.

Indiabulls said a person had been arrested in relation to the blackmail and that it was an “easy target” given its ongoing merger process with Laxmi Vilas Bank.

“We remain determined to break the back of such blackmailing rackets so that nobody in future can use such tactics against Indiabulls,” the company said in a statement.

Indiabulls Housing Finance is the flagship arm of Indiabulls group, a diversified financial services firm.

Ajit Mittal, Indiabulls’ Group executive director, rejected the allegations on TV channels, seeking to calm investor nerves.

“All these things are pure wild allegations, there’s no substance, not an iota of truth in any of these allegations,” Mittal said on CNBC-TV18.

“Let me state it with all the emphasis in my command, very unequivocally ... not even one rupee has been siphoned off,” he said.

Still, shares in the company closed down about 8%, making it the top faller on the broader Nifty index on Tuesday.

Reporting by Abhirup Roy; Additional reporting by Ismail Shakil; editing by David Evans

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