SC Asks ED, RBI To Submit Status Report on Indiabulls Investigation
Moneylife Digital Team 08 May 2025
The Supreme Court of India has directed the directorate of enforcement (ED) and the Reserve Bank of India (RBI) to submit status reports within a week concerning ongoing investigations into alleged financial irregularities by Indiabulls Housing Finance Ltd, now known as Sammaan Capital Ltd. This directive was issued during a hearing on 2 May 2025, of a special leave petition (SLP) filed by the Citizens Whistle Blower Forum, represented by senior advocate Prashant Bhushan.
 
The bench, comprising justices Abhay S Oka and Ujjwal Bhuyan, is examining allegations that the former promoters of Indiabulls Housing Finance, including founder Sameer Gehlaut, engaged in fund siphoning and regulatory violations. The petition claims that substantial loans were extended to various companies, which allegedly redirected funds back into entities controlled by the promoters, thereby misusing public funds.
 
During the proceedings, the Securities and Exchange Board of India (SEBI) informed the Court that it had identified violations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, by Indiabulls Housing Finance. SEBI stated that after examining certain transactions, it issued an administrative warning to the company and notified both the RBI and the Union ministry of corporate affairs (MCA) about these violations.
 
Previously, in a hearing on 3 March 2025, the Supreme Court had instructed the Union government, National Housing Bank (NHB) and RBI to provide status reports on any ongoing investigations related to Indiabulls Housing Finance and its promoters.
 
In a counter affidavit submitted last month, NHB clarified that Indiabulls Housing Finance had transitioned from a housing finance company to a non-banking financial company – investment and credit company (NBFC-ICC), surrendering its certificate of registration for housing finance operations. Consequently, NHB stated that the company now falls outside its regulatory purview and that no investigations are currently pending against it.
 
The Citizens Whistle Blower Forum's petition alleges that Indiabulls Housing Finance and its promoters were involved in round-tripping funds through subsidiaries and affiliated companies, failing to disclose sources adequately, and not maintaining transparent financial records. The petition emphasises that the lack of thorough investigations by relevant authorities poses a significant risk to public interest.
 
Indiabulls Housing Finance has previously refuted these allegations, asserting that the claims are baseless and have caused unwarranted harm to the company's reputation and its shareholders. The company has also sought legal action against Prashant Bhushan for allegedly making false statements in the petition.
 
The Supreme Court has scheduled the next hearing for 13 May 2025, to allow ED and RBI to submit their respective status report
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