When Institutions Dodge Responsibility, Who Answers to the DHFL Victims?
When Institutions Dodge Responsibility, Who Answers to the DHFL Victims?
Posted on 20th August, 2025 (12:02 hrs)
ABSTRACT
On 30th July 2025, OBMA submitted a detailed appeal to India’s top regulatory and judicial authorities, calling for institutional accountability, independent inquiry, and restitution for thousands of DHFL depositors whose savings were wiped out. Despite detailed evidence of auditing failures, flawed credit ratings, and regulatory lapses, SEBI’s response was allegedly a bureaucratic deflection, refusing responsibility. To highlight this stark contrast, we designed a poster juxtaposing the plea for justice with SEBI’s mechanical reply, exposing systemic evasions and the erosion of public trust. Download, share, and spread this poster—because when regulators dodge responsibility, ordinary citizens pay the price.
On 30th July 2025, we sent a detailed email to the Supreme Court of India, the Ministry of Finance, Ministry of Corporate Affairs, the RBI, SEBI, NFRA, and ICAI.
Given below is its full text:
To:
1. The Hon’ble Chief Justice of India
Supreme Court of India
Tilak Marg, New Delhi – 110001
2. The Hon’ble Minister, Ministry of Finance
Government of India
North Block, New Delhi – 110001
3. The Hon’ble Minister, Ministry of Corporate Affairs (MCA)
Government of India
Shastri Bhawan, Rajendra Prasad Road
New Delhi – 110001
4. The Hon’ble Governor, Reserve Bank of India (RBI)
Central Office, Shahid Bhagat Singh Marg
Mumbai – 400001
5. The Hon’ble Chairperson, Securities and Exchange Board of India (SEBI)
SEBI Bhavan, Bandra-Kurla Complex
Mumbai – 400051
6. The Hon’ble Chairperson, National Financial Reporting Authority (NFRA)
Ministry of Corporate Affairs, Government of India
New Delhi – 110001
7. The Hon’ble President, Institute of Chartered Accountants of India (ICAI)
ICAI Bhawan, Indraprastha Marg
New Delhi – 110002
Subject: Request for Institutional Accountability, Independent Inquiry, and Investor Redress in Relation to DHFL Victims’ Losses and Oversight Failures
Respected Authorities,
I hereby respectfully submit this representation as a fixed deposit holder with the erstwhile Dewan Housing Finance Corporation Ltd. (DHFL), whose deposits—along with those of lakhs of similarly placed individuals—were adversely impacted following the revelations of allegedly significant financial irregularities within the company, and the subsequent insolvency resolution process that culminated in massive haircuts unprecedented in post-independent Indian history.
While the primary fraud is attributed to DHFL’s promoters and management, numerous credible sources and expert analyses—including audit reports, RTI responses, and regulatory disclosures—suggest a possible breakdown in multiple layers of institutional oversight, which may have contributed to the scale and duration of public harm.
We hereby present our concerns as follows:
I. Background and Shared Concerns
1. Statutory Auditors appointed under the Companies Act allegedly continued to sign off on DHFL’s financial statements across multiple years, even as the company allegedly siphoned funds to shell entities and issued non-performing loans.
2. Credit Rating Agencies (CRAs) assigned high credit ratings (including AAA ratings) to DHFL instruments during periods in which the company’s financial practices have now been called into question.
3. Regulatory Bodies including SEBI, RBI, and NHB, which had reported oversight over non-banking finance companies (NBFCs) and financial disclosures, appear—based on available records—to have taken delayed or limited action in response to emerging red flags.
4. Retail Fixed Deposit (FD) Holders and Non-Convertible Debenture (NCD) Holders, lacking access to privileged financial information, placed trust in these professional and institutional assessments. The subsequent insolvency resolution process has left many of us with severe financial and emotional losses, with no clear accountability from the professional entities who validated or enabled DHFL’s credibility in the public domain.
Furthermore, repeated RTI applications filed by aggrieved depositors have revealed a striking lack of transparency regarding the expenditures incurred by the Committee of Creditors (CoC) during the insolvency resolution process. Despite the fact that these costs were deducted from the total recovery pool—thereby impacting the final payout to depositors—there has been no itemized public disclosure of fees paid to advisors, legal firms, or valuation professionals. Regulatory bodies such as SEBI, RBI, and IBBI have either denied access to this information or redirected applicants without substantive answers. This opacity not only violates the spirit of the Right to Information Act, 2005, but also raises broader concerns about institutional accountability and due process in large-scale insolvency cases involving public funds and small investors. Kindly view more on this issue in the following:
- RBI-appointed CoC for DHFL’s total expenditure: An RTI to the RBI VIEW HERE ⤡
- Autopsy of RTI in the Police Universe of the Indian Polity VIEW HERE ⤡
- RTI on RTIs: After the Autopsy…VIEW HERE ⤡
II. Legal and Ethical Concerns (Prima Facie)
While the final determination of liability remains subject to ongoing proceedings and further investigation, the following issues are respectfully highlighted for your consideration:
- Potential professional misconduct by statutory auditors, if they failed to exercise reasonable care, diligence, or independence as required under the Companies Act, 2013 and the ICAI Code of Ethics.
- Possible conflict of interest or lack of due diligence by CRAs under SEBI (Credit Rating Agencies) Regulations, if high safety ratings were issued despite deteriorating financial conditions.
- Regulatory oversight gaps, possibly inconsistent with the mandates under the SEBI Act, RBI Act, and other applicable statutes, including the constitutional principles of public accountability and fiduciary trust.
- Violation of rights under Articles 14 and 21 of the Constitution of India—particularly the rights to equality, dignity, and protection of property so as to ensure the right to livelihood—where small investors appear to have suffered disproportionately, without sufficient safeguards.
III. Humble Requests and Suggested Institutional Action
In light of the above and in the spirit of constructive redressal and institutional integrity, I respectfully request the following:
1. NFRA and ICAI to initiate or expedite an independent disciplinary review into the statutory audits conducted during DHFL’s financial reporting between 2015 and 2019, including an inquiry into adherence to professional and statutory obligations.
2. SEBI to review the conduct of the credit rating agencies involved with DHFL during the relevant period, including the internal processes adopted for risk assessment and conflict management.
3. Ministry of Corporate Affairs to consider recommending structural reforms in the audit oversight and CRA regulatory frameworks to enhance transparency and public accountability.
4. Ministry of Finance and RBI to establish a mechanism—either through statutory compensation funds, insurance, or targeted schemes—to provide some form of restitution or redress to small depositors impacted by institutional failures beyond their control.
5. The Hon’ble Supreme Court of India, in its constitutional capacity, is humbly requested to take suo motu cognizance or admit appropriate public interest litigation (PIL) or writ petitions that may seek:
o Constitution of a High-Level Judicial Truth Commission or Ethics Tribunal (for which we have already submitted an online mass petition VIEW HERE ⤡);
o Review of systemic regulatory failures;
o Protection of vulnerable retail investors in NBFCs.
IV. Without Prejudice
This representation is submitted without prejudice to my and others’ legal rights to initiate or participate in:
- Petitions before consumer fora under the Consumer Protection Act, 2019;
- Civil suits for misrepresentation or professional negligence;
- Class-action or writ petitions under Articles 32 and 226 of the Constitution of India for constitutional and public law remedies.
V. Public Campaign and Solidarity
In addition, I and other affected citizens have signed and circulated a public petition seeking justice in this matter. The petition may be viewed here:
https://www.change.org/p/appeal-to-hold-auditors-rating-agencies-accountable-in-the-dhfl-scam
We had previously submitted an earnest appeal to the esteemed authority of the ICAI on 14th March 2021⤡, raising similar concerns. Regrettably, no response was received to that representation.
Therefore, we humbly urge your esteemed offices to take cognizance of this growing appeal for systemic accountability and investor protection.
Yours Most Sincerely,
Dr. Debaprasad Bandyopadhyay
On Behalf of all the distressed DHFL Victims (Usual Disclaimers Apply),
as voiced through Once in a Blue Moon Academia (OBMA)⤡
SEE ALSO:
The letter was not casual, it was an earnest and carefully worded appeal, calling for institutional accountability and independent inquiry into the collapse of DHFL, which wiped out the hard-earned savings of thousands of small depositors. We asked the regulators: who will answer for these unprecedented losses? Who will protect ordinary citizens when the institutions themselves fail?
The very next day, SEBI replied—but instead of addressing the core issues, their response was: “The matter relating to Fixed Deposits does not fall under SEBI’s purview. Please approach the Ministry of Corporate Affairs (MCA).”
The fact is, we had already approached MCA along with SEBI in the very same email, as shown above. Yet what we specifically asked of SEBI was a review of the conduct of credit rating agencies and oversight of regulatory lapses that enabled DHFL’s collapse. What did we get in response? Nothing. Just a bureaucratic shuffle, shifting responsibility to another rung of the administrative hierarchy.
It’s like going to an SBI counter to encash a cheque or open a savings account, only to spend the entire day running from one counter to another, standing in queues, filling forms, providing photocopies—yet leaving without getting anything done. We had faced this same tragic cycle of transfers earlier, when our RTI seeking details of the RBI-appointed CoC’s expenditures for DHFL ran into an identical dead-end:
SEBI’s reply on the 31st of July, 2025, was not an answer; it was an abdication of responsibility. It represented a shifting of burden from one institution to another, leaving the people unheard and in limbo.
To capture this stark contrast between a plea for justice and a regulator’s bureaucratic deflection, we have designed the following poster. It juxtaposes our email’s demand for accountability with SEBI’s mechanical reply, exposing how systems collapse into silence and evasions, rather than action.
This poster is not just an artistic statement—it is evidence. It is a reminder of how public trust erodes when regulators hide behind technicalities, and how citizens are forced to navigate a labyrinth of shifting responsibilities with no real redress in sight.
When regulators dodge, people lose. When responsibility is endlessly passed on, accountability dies.
Here is the infographic/digital poster for all DHFL Victims’ kind perusal:
Download, share, and spread this poster—because silence from regulators cannot erase the losses suffered by lakhs. When responsibility dies, people pay the price.
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