A CBI probe into the country's biggest banking fraud scam allegedly committed by DHFL is looking into the links of certain suspects with the underworld, especially Pakistan-based gangster Chota Shakeel, officials said on Saturday.

The central probe agency has found material showing that public funds were diverted to people allegedly linked to Shakeel, they said.

The officials said this aspect is a matter of further probe, which will be taken forward in due course of time.

In connection with its probe into the DHFL scam, the Central Bureau of Investigation (CBI) carried out searches on Friday at three locations in Mumbai and Pune, from where it recovered a painting and sculptures worth over Rs 40 crore, they said.

During the searches at the premises of Ajay Ramesh Nawandar in Mumbai, the CBI seized a huge collection of uber-luxury watches worth crores of rupees, including Rolex Oyster Perpetual, Cartier, Omega and Hublot Michael Kors, the officials said.

The agency also carried out searches at the flats of Rebecca Dewan at Khar West in Mumbai. The flats worth Rs 8 crore are believed to have been purchased by Kapil Wadhawan of Dewan Housing Finance Limited (DHFL).

The agency is likely to expand its probe against Nawandar and his business associates to follow the money trail of the funds diverted by DHFL's Kapil and Dheeraj Wadhawan, they added.

"During investigation, 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," the CBI said in a statement.

The CBI has booked DHFL, its former CMD Kapil Wadhawan, director Dheeraj Wadhawan and others for an alleged bank fraud of Rs 34,615 crore, making it the biggest such case probed by the agency.

Following the registration of the case on June 20, a team of over 50 officials of the agency conducted searches at 12 premises in Mumbai belonging to the FIR-listed accused, including Sudhakar Shetty of Amaryllis Realtors and eight other builders, on June 22.

The CBI acted on a complaint from the Union Bank of India (UBI), the leader of a 17-member lender consortium that had extended credit facilities to DHFL to the tune of Rs 42,871 crore between 2010 and 2018.

The bank has alleged that Kapil and Dheeraj Wadhawan, in a criminal conspiracy with others, misrepresented and concealed facts, committed criminal breach of trust and abused public funds to cheat the consortium to the tune of Rs 34,614 crore by defaulting on loan repayments from May 2019 onwards.

An audit of DHFL's account books showed that the company allegedly committed financial irregularities, diverted funds, fabricated books and round-tripped funds to "create assets for Kapil and Dheeraj Wadhawan", using public money.