DHFL Independent Director’s Resignation Letter Contradicts Company Disclosure

When Dewan Housing Finance Ltd.'s Independent Director Vijaya Sampath quit, the mortgage lender informed the exchanges that she left for “personal reasons”. But her resignation letter doesn't say anything like that.

The detailed resignation letter, dated Feb. 12 and filed with the Registrar of Companies, said Sampath had earlier expressed her desire to resign but deferred it on Chairman and Managing Director Kapil Wadhawan's request. She also referred to allegations against the promoters.

Investigative website Cobrapost had alleged that promoters siphoned Rs 31,000 crore of public money through shell companies. While the mortgage lender denied the allegations, Sampath said they remain a concern.

At the last board meeting on Jan. 25, the unfounded and serious allegations against the promoters and others were discussed at length, she wrote. “You assured the members that the allegations were untrue, exaggerated and confirmed that there were no related party transactions and that all laws and regulations were complied with; further that all steps were being taken to legally refute the mala fide charges,” Sampath said. “As you are aware, the matter is now in public domain and remains a cause of concern.”

To be sure, Sampath didn't give any particular reason for her decision to step down with immediate effect on Feb. 12 after four years on the board. But she did state that so far she had relied on the auditor's report, the assurances of the company chairman as well as management representations.

“As an independent director, I have been diligent and relied on the report of the auditors, your assurances as chairman as well as management presentations and representations on the veracity of the information provided and to confirm that the company followed the best practices of legal and regulatory compliance, internal controls and governance. I hope that my trust and confidence is not belied in this respect.”

Sampath highlighted the ongoing investigations by the Ministry of Corporate Affairs and Income Tax department before stating that she had decided to step down. Curiously, the company's exchange filing makes no mention of any issues raised by Sampath in the letter.

The disclosure to the exchanges, signed by erstwhile Joint Managing Director and Chief Executive Officer Harshil Mehta, attributed her resignation to “personal reasons”. Mehta also resigned a day after Sampath but continues to be the executive president of the company's retail business.

BloombergQuint awaits a response to an emailed query on why the company cited personal reasons for Sampath's resignation in the exchange filing when her resignation makes no such mention.