DHFL Scam: Who Audited and Rated Our Trust?

Posted on 18th August, 2025 (GMT 15:43 hrs)

ABSTRACT

Between 2010 and 2019, DHFL projected itself as a secure, AAA-rated housing finance company, yet it concealed one of India’s largest financial frauds involving shell companies, fictitious loans, and alleged political collusion with the BJP. Despite glaring irregularities, auditors and credit rating agencies continued to endorse its credibility, betraying the trust of lakhs of ordinary small depositors. The collapse left vulnerable groups—senior citizens, widows, pensioners, and salaried professionals—with devastating losses, while the resolution process (reportedly) disproportionately benefitted one chosen corporate acquirer. This appeal demands disciplinary action against negligent auditors and rating agencies, restitution for depositors, transparency in insolvency proceedings, and systemic reforms to restore accountability in financial governance.

Between 2010 and 2019, Dewan Housing Finance Corporation Limited—better known as DHFL—was celebrated as one of India’s most trusted housing finance companies. It had AAA credit ratings, clean audit reports, and was a household name in affordable housing. To millions of Indians, it symbolized safety, stability, and trust.

But behind this glittering façade, one of India’s largest financial frauds was quietly unfolding. Crores of rupees were allegedly siphoned off through shell companies, fictitious loans, and fraudulent accounting practices—funds that, according to several reports, were even linked to political patronage and suspected terror-financing channels involving Dawood Ibrahim and Iqbal Mirchi, with allegations pointing towards beneficiaries connected to the BJP itself.

And yet, the very institutions designed to safeguard the system—auditors like Chaturvedi & Shah LLP, and credit rating agencies such as CARE, ICRA, and CRISIL—kept reassuring the public that everything was perfectly fine: sab changa si!

This was not just corporate failure. It was a betrayal and breach of trust.

Lakhs of ordinary people—senior citizens, physically challenged persons, Uttar Pradesh Power Corporation Limited employees, philanthropic institutions, widows, pensioners, salaried professionals—invested their hard-earned life savings in DHFL, guided by these glowing reports and ratings. For them, these were not just financial products—they were their security, their children’s education, their retirement plans, their dignity.

When DHFL collapsed, these families were left with nothing but ashes, as the RBI-appointed Committee of Creditors’ resolution process yielded only crumbs for depositors, while the lion’s share went to the corporate acquirer, Mr. Ajay Piramal, raising serious questions of fairness and transparency.

Meanwhile, while super-rich willful defaulters saw their loans simply written off or waived, DHFL—an ongoing concern with millions of vulnerable depositors—was handed over to private corporate players through what appears to be a carefully orchestrated bidding war, rather than being entrusted to public sector units that could have safeguarded public money and ensured just compensation for victims. Was this maneuver designed to legitimize a heavily amended, internally contradictory INSOLVENCY AND BANKRUPTCY CODE/IBC (2016) framework, where the victims were treated just like guinea pigs?

What should have been AAA-rated trust turned into AAA-rated tragedy.

So, what went wrong?

Auditors and rating agencies failed to detect or flag irregularities. They overlooked, or ignored, round-tripping, related-party deals, shell companies, and the evergreening of loans. In doing so, they violated not just professional standards under the Companies Act and the ICAI Code of Ethics, but also their moral responsibility to society.

Credit rating agencies continued to award DHFL the highest ratings—AAA—until almost the very moment of default. They dismissed or ignored whistleblower complaints, falling asset quality, and obvious red flags. In doing so, they suggestively failed in their duty under SEBI’s CRA regulations and betrayed the very trust that ratings are supposed to represent.

This was not mere oversight. It seems like complicity through negligence—a system designed to protect small investors instead enabled fraud on an industrial scale.

Even after the collapse, the betrayal continues. Repeated RTI appeals by Once in a Blue Moon Academia to the RBI, CAG, and IBBI—seeking transparency on how the Committee of Creditors spent its funds, conducted its voting, and maintained its minutes during the resolution process—have been consistently stonewalled. Can you understand the depth of this situation? Depositors—ordinary citizens who lost everything—are not even allowed to see how money was spent, or how decisions were made about their futures. This secrecy is not just unethical. It is undemocratic. Transparent accountability is the bare minimum victims deserve.

That is why we are demanding justice, truth, and accountability.

We are demanding:

One: Disciplinary action against allegedly negligent auditors and complicit credit rating agencies.

Further reinforcing this call for accountability, we are reminded how the National Financial Reporting Authority (NFRA) had earlier imposed stringent penalties on auditors for lapses in DHFL’s FY18 audits. In December 2023, the NFRA banned Jignesh Mehta for 10 years and Amit Vinay Chaturvedi for five years, each fined ₹5 lakh, for gross negligence and failure to apply professional scepticism during their audits of the DHFL. These are among the severest punishments extended by the NFRA to DHFL auditors in various cases of misconduct. NFRA’s investigation revealed serious misconduct in Chaturvedi’s branch audits across five DHFL branches, highlighting systemic failures at the audit level.

NFRA debars two CAs for lapses in DHFL audit VIEW HERE ⤡ (As reported on 7th December, 2023 ©LegalWorld)

DHFL Branch Audit: NFRA Slaps Rs2 Lakh Penalty on 2 CAs, Bars Them for 1 Year VIEW HERE ⤡ (As reported on 26th June, 2024 ©Moneylife)

Two: Restitution—Compensation with Interest for the DHFL Depositors, Funded by Penalties on Those Who Failed in Their Duty.

This demand is now grounded in a landmark court ruling: on 31 July 2025, the Chandigarh State Consumer Disputes Redressal Commission held that Catalyst Trusteeship Ltd., CARE Ratings, and Brickwork Ratings were liable for negligence in the DHFL case, ordering them to compensate an investor named Jyoti Khemka with interest—marking the first time that intermediaries, not just the defaulter or the corporate acquirer, were held accountable and were made to pay for their severe lapse. This precedent opens a new avenue of justice for all DHFL victims, enabling them to pressurize and pursue trustees, rating agencies, and other gatekeepers—not merely the insolvent company itself—for the recovery of their losses.

Three: Transparency—Mandatory Disclosure of DHFL-CoC Minutes, CoC Votings, and CoC Expenditures, RBI and NHB Inspection Reports, and the Working Papers of Auditors.

Four: Structural Reforms in terms of Auditor Rotation, an End to the “Issuer-Pays” Model for Rating Agencies, Strengthening of NFRA, and Creation of Early Warning Systems to Protect Future Investors.

These are not just technical fixes. They are moral imperatives. Because what happened with DHFL is not an isolated case. It reflects a deeper rot in our financial governance system—a system where white-collar impunity tramples ordinary families.

We are not asking for vengeance against any one person. We are asking for justice, the whole justice. For truth. For accountability.

Let AAA once again stand for trust, not tragedy.

Let us ensure that never again do ordinary Indians—mothers, fathers, grandparents—lose their life savings because those in power chose silence over responsibility.

If you believe in justice—if you believe ordinary families deserve their dignity back—please sign the petition link given in the video description box. Share it widely. Stand with the victims of DHFL.

Together, we can ensure that this betrayal is not forgotten, and that such a scam never happens again.

Like, comment, share this video and subscribe to our channel—show your solidarity with the DHFL victims in their fight for justice in an India that is run by corporate interests instead of people’s rightful demands.

Thank you for watching. See you again at the crossroads of our web-based, non-violent civil disobedience movement. Thank You.

From AAA-Ratings to Haircut-Ashes: Rating and Auditing Gaps in the DHFL “Scam” (AN ONLINE MASS PETITION)

 SIGN HERE: https://chng.it/dSwwM2pYNT

A mass appeal exposing systemic failures in auditing, credit rating, and regulatory oversight that betrayed public trust. It demands action by NFRA, ICAI, SEBI, and RBI, restitution for depositors, and transparency in insolvency processes to prevent future frauds. 

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