May 22, 2019 / 4:43 AM / 2 months ago

India's Dewan Housing Finance sinks on reports of deposit curbs

BENGALURU, May 22 (Reuters) - Shares of India’s Dewan Housing Finance Corp Ltd (DHFL) fell as much as 18% to 106.85 rupees on Wednesday, on media reports that the home loan lender would halt early withdrawals from existing deposit schemes and stop taking new ones altogether.

DHFL has been under scrutiny since media outlet Cobrapost alleged in January that it diverted loans from Indian state-run lenders to shell companies, including those linked to its controlling shareholders. Its stock has lost a quarter of its value since then.

A revision in credit ratings of their fixed deposit programme prompted DHFL to take these measures, according to a statement from the company to its depositors and financial planners viewed here by BloombergQuint.

On May 14, CARE Ratings placed here some of the company's debt instruments, including non-convertible debentures, or NCDs, worth 466.55 billion rupees ($6.70 billion) on credit watch with negative implications.

The latest development comes months after Chief Executive Harshil Mehta resigned amid financial mismanagement allegations and DHFL redesignated Chief Financial officer Santosh Sharma to another role.

DHFL did not immediately respond for a Reuters request for comment.

$1 = 69.6780 Indian rupees Reporting by Chandini Monnappa in Bengaluru; Editing by Rashmi Aich

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