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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