PNB Housing Finance Ltd. has identified a fraud involving borrower Happy Home Corporation, with the total amount reported as fraud standing at Rs 421.81 crore, according to an exchange filing late Monday.
The housing finance company said the account has been classified as fraud after following the applicable regulatory process and principles of natural justice. It has also reported the matter to the National Housing Bank (NHB) in line with regulatory requirements.
According to the filing, various credit facilities were sanctioned and disbursed to Happy Home Corporation between 2016 and 2021. The loan accounts subsequently turned non-performing assets (NPAs) and were fully written off in FY23. As a result, PNB Housing said the fraud classification will not have any financial impact on the company's financial statements or operations, as the exposure has already been provided for in its books.
The lender added that it is pursuing appropriate legal action against the borrower following the fraud classification.
Under RBI and NHB regulations, lenders are required to report borrower accounts classified as fraud after completing prescribed due process. Such disclosures do not necessarily result in an immediate financial hit if the underlying exposure has already been recognised as an NPA and written off or fully provisioned.
Since the account was written off during FY23, the fraud classification does not alter PNB Housing's current profit and loss statement or balance sheet. However, the move enables the lender to pursue legal remedies while complying with disclosure norms applicable to listed entities.
The company said the disclosure was being made under Regulation 30 and Regulation 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
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