Just under a year ago, I reported (Moneylife Exclusive: Serial Fraudster Dinesh Dalmia Strikes Again: Dupes Lenders of Nearly Rs200 Crore) that Dinesh Dalmia, serial fraudster and founder of the now-defunct DSQ Software group, had resurfaced under a new guise. This is after having spent several years behind bars for fraud, stock manipulation and other legal transgressions in India and the United States (US). This time, he allegedly defrauded nine banks and finance companies of nearly Rs200 crore through a company called Right Health Platter Pvt Ltd (Right Health), ostensibly operating in dairy business.
In a twist, typical of Mr Dalmia’s stranger-than-fiction career, a Bengaluru sessions court, on 17April 2025, granted him anticipatory bail in a criminal case filed by Zetwerk Manufacturing Businesses Pvt Ltd (Zetwerk), citing insufficient evidence. However, bail conditions are strict and include a Rs5-lakh personal bond, a matching surety, surrender of his passport and a ban on travel without permission.
This is the second case filed against the 63-year-old; the first was initiated in April 2024 by Vivriti Capital which named him the principal accused in a case involving cheating, conspiracy and breach of trust. Zetwerk, a manufacturing and supply chain firm with operations in India and Singapore, accuses Mr Dalmia of criminal conspiracy, forgery and misappropriating US$4.7mn (million) in a complex cross-border transaction. The case is also being investigated by the criminal investigation department (CID).
Despite a forensic audit reportedly confirming fraudulent activity, six Indian banks, that extended credit facilities to Dalmia-linked entities, appear to be dragging their feet after filing a police complaint. The charges against Dinesh Dalmia and the ease with which he has been able to obtain large credit facilities raise troubling questions about the efficacy of India’s know-your-customer (KYC) regime and its implementation under anti-money laundering laws.
How did Mr Dalmia, a known offender, gain access to significant funding, once again? Especially when he claims that he held no official role in the borrowing entities and signed no documents. Yet, multiple lenders, including HDFC Bank, seem to have dealt with him directly—sometimes under the alias ‘Dinesh Kumar’.
So what is the web that Mr Dalmia has spun this time?
At the centre of the alleged fraud is Right Health, incorporated in 2020. Over the following years, a cluster of interconnected firms emerged—some overseas, with similar-sounding names and overlapping directors. Zetwerk specialises in manufacturing and supply-chain solutions and has operations in India and Singapore. Dinesh Dalmia, allegedly, represented himself as a director of Right Health and negotiated a complex deal. The transaction that triggered Zetwerk’s complaint involved a memorandum of understanding (MoU) between Zetwerk India and Right Health for supply of dairy products. Zetwerk Singapore was to purchase goods from Right Health, resell them to Avemore Singapore and receive payments from Avemore. However, goods were to be shipped directly from Right Health to Avemore, in an arrangement that seems both convoluted and opaque.
Whether on the basis of these agreements—or possibly forged documents—multiple banks extended substantial credit to Right Health. There are many allegations flying around from all parties involved which can only be investigated by the police or decided in court.
Trouble began in February 2023, when Avemore stopped paying Zetwerk, prompting the latter to halt further orders and allege a US$4.7mn loss stemming from allegedly forged invoices discounted through HDFC Bank.
Mr Dalmia’s defence has disputed these claims, insisting that Zetwerk’s total payment to Right Health was only US$6.9mn, not US$16.46mn, as alleged. It also points out that insolvency proceedings launched by Zetwerk against Avemore in Singapore were dismissed—with costs.
But the real question is: Why did Indian banks so readily extend loans to an entity effectively controlled by a known fraudster with no formal link to the company. A police interrogation of Arun Aravind, national sales head at HDFC Bank, sheds some light. He admitted that Right Health had an ‘existing relationship’ with HDFC’s Gopalpuram branch in Chennai since 2020—the same year it was incorporated. How did this happen? He also confirmed that the Bank had interacted with Mr Dalmia, although he claims to have had no official role in Right Health.
What followed was a meteoric rise in lending (see table below) as explained by him to the Chennai police. A Rs1.5-crore loan in July 2021 after ‘proper due diligence’, says Mr Aravind grew to Rs2 crore in October 2021, Rs5 crore in November 2021, jumped 10-fold to Rs50 crore by June 2022 and up to Rs70 crore by December 2022. Strangely, in July 2023, just a month before Right Health collapsed, the facility was reduced to Rs62 crore.
The pattern is likely to have been repeated across other banks. In August 2023, Mr Dalmia—who insists he had no formal involvement with Right Health—emailed multiple lenders, including Axis Bank, IndusInd Bank and Bank of Maharashtra, accusing one Gopal Padia of defrauding the company. Mr Padia had been presented as a business partner and buyer of Right Health’s products, during better times. Both men now accuse each other in their responses to me; only the courts or the police can determine who is telling the truth.
Mr Dalmia’s email, finally, woke up the banks and triggered action. A consortium of lenders was formed, in line with guidelines of the Reserve Bank of India (RBI). It commissioned a forensic audit and, based on the findings, filed a complaint with the bank fraud investigation wing of Chennai police, in May 2024. It remains unclear whether other financiers have lodged similar complaints. With no clear paper trail connecting MrDalmia to Right Health, Avemore, or Zetwerk Singapore, lenders perhaps face an uphill battle in holding him accountable.
What is clear, however, is that India’s KYC system—extremely burdensome for ordinary citizens and even the poorest Indians surviving on subsidies—is completely ineffective when it comes to habitual white-collar criminals. The ease with which Mr Dalmia secured large loans suggests either systemic incompetence or wilful negligence and collusion. Regulators and the public alike must now ask: Have any internal inquiries been launched against the bankers who facilitated this fiasco? Or will this, like so many other financial scandals, fade from memory without consequence? HDFC Bank has yet to respond to my queries about follow-up action.
The bank rejected SIP citing KYC non compliance inspite of they authorising the mandate & recovered bank charges. In other case my client based in Canada is asked to come to India by HDFC to get his demat active. They are recovering demat charges from the same account but not giving access to demat. Strange but true.
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