63 Moons to challenge DHFL order
Suit says creditors should get recovery benefit
DHFL debenture-holder and market infrastructure provider 63 Moons Technologies plans to challenge the order of the National Company Law Tribunal (NCLT) permitting Piramal Group to take over DHFL under the Insolvency and Bankruptcy Code (IBC).
Tech firm 63 Moons holds more than Rs 200 crore of non-convertible debentures (NCDs) of DHFL.
Jignesh Shah-promoted 63 Moon believes the current resolution plan is contrary to law and against the interest of DHFL creditors, including NCD-holders.
The company had filed an application in the NCLTMumbai seeking that recovery benefit of approximately Rs 45,000 crore filed by the DHFL administrator under section 66 of IBC should come to creditors, including debentureholders.
"The current resolution plan is disappointing for NCD-holders 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 comprise mainly of banks, have recourse to personal guarantees of promoters whereas NCDholders do not have any such contractual recourse," 63 Moons said”, adding:
"NCD-holders will be left high and dry with a massive 65 per cent to 75 per cent haircut if in future such recoveries from fraudulent transactions are allowed to pass through to the resolution applicants, instead of the creditors."
"The current DHFL resolution plan allows the Piramal Group to buy the company by paying mere Rs 37,500 crore as against the outstanding debt of Rs 85,000 crore. Also, in addition to this, the benefits of claims of over Rs 45,000 crore are to be appropriated by Piramal fully," the petition said.
"The Resolution Plan is drafted in such a way that it favours the resolution applicant (buyer), in this case Piramal Group, allowing it to reap the benefits of recoveries from the promoters," 63 Moons said.
"Ascribing a value of Re 1. to the recoveries of fraud where claims are in excess of Rs 45,000 crore creates unjust enrichment of the buyer (Piramal) at the cost of creditors,” it alleged.