Dewan Housing Finance Corporation Ltd (DHFL) has announced that its CEO Harshil Mehta has decided to resign from his position with immediate effect.
In a filing to the Bombay Stock Exchange, DHFL stated, “Due to full-time engagement with other assignments within the company, Harshil Mehta has expressed his desire to resign from the position of Whole Time Director (designated as Joint Managing Director and CEO) from the board of directors of the company with immediate effect.”
However, he would continue to be associated with the company and shall hold the designation of Executive President -Retail Business with effect from February 14, 2019, the company stated.
In addition, the board has recommended the appointment of Sunjoy Joshi as an Independent Director and Srinath Sridharan as a Non-Executive Director.
Harshil’s resignation closely follows the allegations by investigative media outlet Cobrapost which stated in a report last month that the firm had through layers of shell companies allegedly siphoned off Rs 31,000 crore out of the total bank loans of Rs 97,000 crore.
The report alleged that the scam has been pulled off mainly by sanctioning and disbursing huge amounts of secured and unsecured loans to dubious shell companies related to DHFL's primary stakeholders Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan. DHFL however had denied the allegations of financial mismanagement. The resignation of the CEO however will certainly pique more interest in this case given that Dewan shares have lost nearly 50 percent of their value since the allegations of financial mismanagement were made.
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