The National Housing Bank's (NHB) preliminary investigations into the books of Aviom India Housing Finance revealed inflated investments in mutual funds to show higher cash balance, said people aware of the development.Aviom has informed lenders that it is investigating charges of fraud within the company, as reported by ET on November 26.The NHB investigation showed that "the statement of accounts of mutual fund(s) appear to be managed", the company informed lenders, said people cited above. The investment in mutual funds is much lower than Rs 115 crore disclosed to their auditors, the people said.NHB, a quasi-housing finance regulator, has appointed consulting firm EY India to conduct a forensic audit on the housing finance company, which is focused on women borrowers availing of loans ranging from Rs 1 lakh to Rs 5 lakh.Aviom disclosed to their creditors that payments could be delayed this month as the company is facing a cash crunch after it became aware that certain fraudulent transactions have taken place, as reported by ET on November 26.Backed by impact investors Nuveen and Gojo & Co, Aviom has a loan book of Rs 1,752 crore by the end of March 2024 and catered to underserved masses.The company informed lenders it may need to restate certain financial information based on NHB's recommendations. The company also informed lenders that "short-term liquidity has been significantly impacted due to sticky receivables to the extent of Rs 35 crore". The company said that it is "in talks with potential investors on various alternates for raising additional capital" It is uncertain if existing investors or lenders would provide new loans under these circumstances, the people said.The company's statutory auditor, SN Dhawan & Co, pointed out certain discrepancies in the books. The previous auditor, SCV & Co, has sought additional information and requested the company to cease using last year's auditor's report, as reported by ET. On November 19, the company filed a complaint with the Economic Offences Wing regarding the fraud.In response to ET's query, Aviom said it is investigating the matter and is committed to taking appropriate measures. EY did not respond to ET's requests for comment.