DHFL shares tumble 20% as govt launches probe against 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

Shares of Dewan Housing Finance Corporation (DHFL) touched 52-week low of Rs 129.60, down nearly 20 percent intraday on January 31 on reports of Indian government launching 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 the probe has been launched.

Cobrapost said on January 29, DHFL and its promoters diverted funds to shell companies to buy assets. And, firms linked to Dewan’s controlling shareholders – the Wadhawans- made political donations beyond mandated levels.

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