Indiabulls Housing Finance Ltd shares surged 25% in early trade on Monday after the company informed exchanges that the Reserve Bank of India (RBI) has admitted in the court that the company has not violated any law while conducting its lending operations.
Indiabulls Housing Finance said after market hours on Friday that an affidavit submitted by RBI in the court has mentioned that there were no violations of any nature or kind regarding the company.
The RBI affidavit added: “The Writ Petition is not maintainable either on facts or law as against this Respondent, the Reserve Bank of India, and hence liable to be dismissed as such.”
The affidavit also highlighted the details of loans taken by the borrowers mentioned in a PIL filed against the company and the repayment dates of such loans.
Indiabulls Housing Finance shares touched a high of Rs 349.75 apiece on Monday morning, but could not hold on to most of the gains and were trading at Rs 294.50, up 5.2%, at 2:51 pm.
“Indiabulls Group has always maintained that all the charges against the group and Indiabulls Housing Finance are baseless and the Reserve Bank of India’s affidavit in the court has proved it,” said Ajit Mittal, group executive director, Indiabulls Group.
The PILs filed against the company were part of a wider extortion racket, he added. The company has repaid all its obligations in the last 18 months without any delay and is well-poised to service all liabilities, Mittal noted.
The PILs in question here had alleged in September last year that Indiabulls Housing, through its promoters and various group companies and subsidiaries, had been advancing dubious loans to companies owned by large corporate groups which in turn had been routing that back to the accounts of companies owned by the promoters of Indiabulls, so as to increase their personal wealth.
Indiabulls has then contended that the allegations were made without doing proper research and was relying on a letter written by BJP leader Subramanian Swamy to Prime Minister Narendra Modi accusing the company of misappropriation of funds. Swamy had released a letter he sent to Modi in June, accusing Indiabulls of embezzling Rs 1 lakh crore from the National Housing Bank.