Hindustan Times ST (Jaipur)
NCLT okays Piramal’s offer for DHFL
The NCLT’S order is subject to judgments from the NCLAT and the Supreme Court
MUMBAI: The National Company Law Tribunal (NCLT) on Monday gave its approval to Piramal Group’s bid for bankrupt-dewan Housing Finance Corporation Ltd (DHFL), subject to certain conditions.
The tribunal’s Mumbaibench, chaired by H P Chaturvedi and Ravikumar Duraisamy, said the approval is subject to the final judgement from the National Company Law Appellate Tribunal (NCLAT) and the Supreme Court’s judgment on Kapil Wadhawan in the matter.
In its order, NCLT asked DHFL’S Committee of Creditors (COC) to consider giving more money to small fixed deposit holders under the approved resolution plan.
“We are not remanding the plan back to COC, we respect their commercial wisdom,” it said. The COC may thus consider re-allocation of funds under approved resolution plan for FD holders.
NCLT also rejected former DHFL promoter Kapil Wadhawan’s plea to get access to a copy of the resolution plan.
Piramal Group in its statement said they are “pleased” by the judgement, noting that they received endorsement of 94% lenders and subsequent approvals from the Reserve Bank of India (RBI) and the Competition Commission of India (CCI), which “reiterates the strength and quality” of its bid.
“This is one of India’s largest Insolvency and Bankruptcy Code (IBC) proceedings, and the very first in the financial sector. In that regard, it is an important and positive trendsetter for the future. The approval from NCLT is a significant milestone in DHFL’S resolution and an affirmation of the sanctity of the IBC process in India,” Piramal Group said.
“We are committed to collaborating with all relevant authorities, regulators, creditors and investors involved in this resolution and look forward to a speedy culmination of the resolution process,” it added.
On May 25, NCLAT stayed the direction of NCLT asking the lenders of DHFL to consider the offer by Wadhawan.
The appellate tribunal had also clarified that its order should not come in the way for NCLT to decide on approval for the resolution plan selected by the COC.
NCLAT’S direction had come on an urgent petition moved by the Union Bank of India on behalf of the COC.
On May 19, NCLT asked the Rbi-appointed administrator of DHFL to present the settlement plan offered by Wadhawan to the COC.
In January this year, the COC voted in favour of selling DHFL to the Piramal Group under the Insolvency and Bankruptcy Code.
Last year, Wadhawan had made his settlement offer to the COC. The offer was rejected by the creditors, citing lack of credibility and the valuations attached to the proposed asset sales. In the plan, Wadhawan had proposed to repay lenders by selling assets.
In November 2019, RBI had referred Dhfl—then the thirdlargest pure-play mortgage lender—for resolution under the Code.
DHFL had gone bankrupt with more than ₹90,000 crore in debt to various lenders, including banks, mutual funds and individual investors who kept fixed deposits with the company.