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August 6, 2019

Deloitte drops Dewan Housing Finance Corp in India

As had been widely expected, Deloitte Haskins & Sells LLP (Deloitte India) has resigned as joint statutory auditor of Dewan Housing Finance Corporation Limited (DHFL) in a letter to the firm dated 2 August 2019. DHFL informed the National Stock Exchange of India on 5 August 2019.

Local press speculation has suggested that second auditor, local firm Chaturvedi & Shah, may also quit due to unsatisfactory responses from the company to queries related to fund deployment.

Deloitte india tendered its resignation as statutory auditors of DHFL with immediate effect, saying that ‘In view of the matters stated in the Disclaimer of Opinion in the Financial Statements of the Company for the year ended on 31st March 2019 issued by them and its consequential effect on reporting under the Companies Act, 2013, their firm's policy on client acceptance and continuation does not permit them to continue as statutory auditors of the Company’.

DHFL is struggling to control some INR90bn of deht and has defaulted on numerous repayment obligations. The company is in talks with creditors to put together a ‘Resolution Plan’. Latest proposals include the promise of no principal haircuts to any creditors; a moratorium on repayments; measures towards addressing aligning asset-liability mismatch; and seeking fresh funding from banks.

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