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63 moons urges NCD, FD holders to oppose DHFL resolution plan at NCLT, seek Rs 30,000 cr
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SME Times News Bureau | 08 Jan, 2021
63 moons technologies has invited other non-convertible debentures (NCD)
and fixed deposit (FD) holders of Dewan Housing Finance Ltd (DHFL) to
oppose the DHFL resolution plan at the National Company Law Tribunal
Mumbai, by filing separate applications to seek fraudulent transaction
recovery benefits of Rs 30,000 crore.
The company stated that
both NCD and FD holders have to face huge hair-cuts, approximately of Rs
50,000 crore in the current insolvency process. The promoters of DHFL
have siphoned approximately Rs 30,000 crore, which has been traced by
the Grant Thornton forensic audit report itself.
63 moons, which
holds around Rs 200 crore of NCDs of DHFL, has already filed an
application in the NCLT Mumbai, seeking that the fraudulent transaction
recovery benefit of approximately Rs 30,000 crore filed by DHFL
administrator under Section 66 of Insolvency and Bankruptcy Code (IBC)
should come to creditors, including NCD/FD holders who are the actual
sufferers of the default, and not to the buyer (Resolution Applicant) in
IBC.
The current DHFL resolution plan proposes that the recovery
will go to the buyer, who would be paying a mere Rs 35,000 crore as
against the debt of Rs 85,000 crore, resulting in Rs 50,000 crore
write-off/loss to the creditors.
63 moons has argued that
applications for recovery under Section 66 are meant for the benefit of
the defrauded parties and the creditors and cannot be whittled away by
the buyer (Resolution Applicant).
"It appears that the valuation
of DHFL does not appear to have been done keeping present assets and
future recoveries in mind like in the regular course for NBFCs. Further,
it is not as if the recoveries from the promoters are uncertain. The
Wadhawans have made it clear in public domain that they are in
possession of assets worth more than Rs 40,000 crore. Hence, the
recovery of money from the Wadhawans is realistically possible and
foreseeable," the statement noted.
However, the buyers
(Resolution Applicants) seek to carve a colossal advantage for
themselves and rendering the NCD-FD holders to fend for crumbs, it said.
63
moons pointed out that the current resolution plans in case of DHFL is
in violation of the IBC and is disappointing for NCD creditors in as
much as they stand to bear the greatest loss as opposed to any other
party involved.
Other members of the Committee of Creditors, who
consist mainly of banks, have recourse to personal guarantees of
promoters whereas NCD holders do not have any such contractual recourse.
NCD holders will be left high and dry with a massive 65 per cent to 75
per cent hair-cut (Rs 50,000 to 60,000 crore), if future recoveries from
fraudulent transactions are allowed to pass to the resolution
applicants, instead of the creditors.
Currently, the resolution
plans submitted by various resolution applicants do not give benefit of
recoveries made from the fraudulent transaction amount arising from the
avoidance applications and it will go to the buyer (Resolution
Applicant), contrary to the Insolvency and Bankruptcy Code, 2016. These
same resolution plans have been put up for voting.
"All NCD,
fixed deposit holders and other creditors, who want to join NCLT and
other proceedings, including the EOW Chennai and other agencies for
recovery of money can send their details voluntarily to the company. We
will try to help them within the framework of law," 63 moons added.
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