New Delhi,  The Central Bureau of Investigation (CBI) on Thursday said that they have seized two paintings worth Rs. 5.50 crore, two watches worth Rs. 5 crore and jewellery worth Rs. 2 crore, in connection with DHFL loan fraud case of Rs 34,615 crore.

The seized items included two paintings, one made by F.N. Souza (1964) and another by S.H. Raza (1956); two watches of Jacob & Co & Frank Muller Geneve make and jewellery.

The CBI said that the promoters had acquired expensive items using the diverted funds.

DHFL directors Kapil and Dheeraj Wadhawan who were arrested by the agency, were brought to Delhi from Lucknow. On Wednesday, they were produced before Delhi's Rouse Avenue Court which sent them to three-day CBI custody.

Earlier on July 8, the CBI had recovered paintings and sculptures worth Rs 40 crore.

A case was registered on June 20 this year. Vipin Kumar Shukla, DGM and Branch head of Union Bank of India, Nariman Point, Mumbai lodged an FIR in this connection.

It was alleged in the complaint that Dewan Housing Finance Corporation Ltd (DHFL), its former CMD Kapil Wadhawan, Dheeraj Wadhawan, present director Sudhakar Shetty and other accused entered into a criminal conspiracy to cheat the consortium of 17 banks led by Union Bank of India.

"Wadhawan and others induced the consortium banks to sanction huge loans aggregating to Rs. 42,871.42 crore and siphoned off and misappropriated a significant portion of the said funds by falsifying the books of the DHFL and dishonestly defaulted on repayment of the legitimate dues of the said consortium banks. They caused a wrongful loss of Rs. 34,615.00 crore to the consortium lenders," said the CBI.

The CBI after conducting an inquiry lodged the case under sections 120-B read with 409, 420, 477-A of IPC and Section 13(2) read with sections 13(1)(d) of Prevention of Corruption Act.

The FIR was lodged against DHFL, its former CMD Wadhwan, MD Dheeraj Wadhwan, present director Sudhakar Shetty, Amaryllis Realtors LLP (ARLLP), Gulmarg Realtors LLP (GRLLP), Skylark Buildcon Pvt Ltd, Darshan Developers Pvt Ltd, Sigtia Constructions Pvt Ltd, Creator Builders Pvt Ltd, Township Developers Pvt Ltd, Shishir Reality Pvt Ltd, Sunblink Real Estate Pvt Ltd and other unknown persons including public servants.

The official said that it was found that the promoters had allegedly diverted the funds and made investments in various entities. It was also alleged that the promoters had acquired expensive paintings and sculptures worth about Rs 55 crore using the diverted funds.

Earlier, searches were conducted on June 22 at 12 locations in Mumbai on the premises of accused which led to recovery of incriminating documents.

Further investigation in the matter is on.