DHFL Administrator Moves NCLT against Wadhawans in a Rs 2,150-cr Fraud
The administrator of the now-bankrupt Dewan Housing Finance Corporation Ltd. (DHFL) has filed an application in the NCLT against promoters Wadhawans, inter-corporate deposit (ICD) entities and others for fraudulent transactions worth Rs 2,150.84 crore during the company's stake sale in Pramerica Life Insurance Company Limited to DHFL Investments Limited and in respect of certain ICD given by the company to certain entities.
 
The fraud was unearthed in the transaction audit of the company done by Grant Thornton India LLP.
 
On the basis of the report filed by Grant Thornton, the administrator has filed application against Kapil Wadhawan, Dheeraj Wadhawan, Aruna Wadhawan, Wadhawan Global Capital Limited, the ICD entities and certain other entities claiming the amount from them along with the interest for the remaining period.
 
As per the transaction auditor's report, "the monetary impact of the concerned transactions covered under the application include—Rs1,864.84 crore, including principal of Rs1,739.57 crore and accrued interest of Rs125.27 crore, being the amount outstanding in the books of the company as on November 30, 2019, notional loss in interest of Rs 58.34 crore due to lower interest rate charged while giving ICDs and Rs227.66 crore transferred in the form of ICDs and used to repay a promoter linked entity."
 
As per the report prepared by the transaction auditor, the concerned transactions occurred during financial years 2016-17 to 2018-19.
 
"The Administrator has filed an application in respect of agreements executed at the time of selling the Company's stake in Pramerica Life insurance Company Limited (erstwhile DHFL Pramerica Life Insurance Limited) to DHFL Investments Limited and in respect of certain Inter-Corporate Deposits given by the company to certain entities (ICD entities) before the Mumbai bench of the National Company Law Tribunal under Section 45, Section 46, Section 49, Section 60(5) and Section 66 of the Code on October 05, 2020 against Kapil Wadhawan, Dheeraj Wadhawan, Aruna Wadhawan, Wadhawan Global Capital Limited, the ICD entities and certain other entities," said a regulatory filing.
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    Pandemic-hit fashion retailers to see revenue dip 35-42%: ICRA
    The coronavirus outbreak has adversely impacted the credit profile of the Indian retail industry as consumers deferred their discretionary spends, amid the shutdown of malls across the country as well as closure of non-essential stores across most states in the country.
     
    According to rating agency ICRA, value and lifestyle fashion retailers are expected to witness 35%-42% decline in revenues in FY21, with an expected decline in their operating profit margin (OPM) by 300-500 bps. Accordingly, it has assigned a 'Negative' credit outlook on the value and lifestyle fashion retailers.
     
    According to the agency, given the pronounced revenue decline, the fashion retailers will witness a material weakening in their credit profile in FY2021, though some of the retailers have strong liquidity and/or financial support from a strong parentage.
     
    The F&G retailers are expected to report 3-7% revenue growth in FY2021, with increased proportion of food and staple products (vis-a-vis general merchandise) in their revenue mix, it said.
     
    While this would weaken their gross margins on a Y-o-Y basis, no material weakening in the credit metrics of F&G retailers is expected, ICRA said.
     
    Sakshi Suneja, Assistant Vice President, ICRA, said: "Value and lifestyle fashion retailers reported a whopping 81% Y-o-Y revenue decline in Q1 FY2021, adversely impacted by the lockdown during the first 1.5 months of Q1 FY2021.
     
    "Revenues in Q2 FY2021, though improved sequentially, are substantially lower on a Y-o-Y basis, in the backdrop of local lockdowns and restrictions. Meaningful ramp up in sales is expected from Q3 FY2021 onwards, led by increased demand during the festive season and substantial easing of restrictions under the new unlock guidelines with effect from September 1, 2020."
     
    Given the high operating leverage of the retail business and against the backdrop of sharp revenue decline, most of the fashion retailers invoked the force majeure clauses in their rental agreements to save on the rental costs during the period of lockdown. These entities are also negotiating their rental agreements with the landlords to convert their fixed rental charges into variable upon commercialisation of operations for FY2021.
     
    To conserve cash and optimise working capital, most retailers have restricted fresh inventory purchase during April to October as they are looking to carry forward their spring-summer inventory till the autumn season.
     
    Nonetheless, given the expected pronounced revenue decline and changing consumption patterns (with increased demand for casual wear), the OPM of retailers like Aditya Birla Fashion, Future Lifestyle Fashions, Shoppers Stop Limited, Trent Limited is expected to weaken by 300-500 bps in FY2021.
     
    The industry also remains exposed to risk of inventory write-offs given the overall slowdown in demand, especially for formal wear segment.
     
    Giving more insights, Kinjal Shah, Vice President, ICRA, said: "The pandemic has spurred the adoption of online retailing in India, with most of the retailers reporting more than 50% jump on a Y-o-Y basis (albeit on a low base) in online sales in Q1 FY2021, leading to increased proportion of online sales within the overall mix. Retail entities have also curtailed their store expansion plans for FY2021.
     
    "As per our research, the value and lifestyle fashion retailers have deferred around Rs19.7 billion worth of capex plans towards store additions in FY2021 post-Covid."
     
    F&G retailers in ICRA's sample set reported a Y-o-Y revenue decline of 11% in Q1 FY2021, given the restrictions on the sale of general merchandise (non-food categories) as also overall restrictions on movement of people and store operating hours.
     
    Aided by significant easing of lockdown restrictions (facilitating sales of non-food categories) as well as onset of festive season, the revenue growth is expected to revert to positive trajectory from H2 FY2021 onwards.
     
    ICRA expects the F&G retailers to witness a revenue growth of 3-7% in FY2021. The share of non-food categories in overall revenue mix is, however, expected to remain lower on Y-o-Y basis and constrained by the slowdown in discretionary spends.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    tarotbangalore

    2 months ago

    Ecom site Ajio has started cheating people and uses corona as excuse for all manupulations ,They Are more than eager to deliver orders very very fast but
    1—they send items defective,without tags so that people can’t return it ,
    2–Ajio uses technical excuse to issue refunds to wallet even when you asked for bank refund and once you have money in Ajio wallet your App will stop working ,they will block your account as Ajio wants to grab the wallet money .
    3.Bank refund request will be ignored and refund will be credited to Ajio wallet with lock and key in hands of Ajio so they control your wallet by blocking your account .
    4- Ajio CS can’t be trusted what they say orally is not true and they will not register your complaints .
    5-Ajio don’t share higher officers contacts as they are all part of frauds .
    6–If at all they register your complaint about refund they will convert the complaint heading into website issue related complaints .
    7—They change the Date ,Headings and matter of your complaints ,screen shots available to prove it
    8—Even if you returned the product one month back Ajio will change dates of pickup date in your account And pickup date is false manipulated by 10 to 15 days to avoid refunds .
    9–Ajio has PERMANENT CORONA as excuse for Refunds and returns but otherwise for selling and promoting items it is Healthy as horse .
    10–We have issues with Amazon or Alibaba but I have never seen them manipulating Accounts or Data
    11— So the NOBLE price for cheating goes to AJIO by RELIANCE group .Made in INDIA scam ?

    ADIA to invest Rs5,512 cr in Reliance Retail Ventures; RRVL raises Rs37k cr
    Reliance Industries Limited and Reliance Retail Ventures Limited (RRVL) announced on Tuesday that a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest Rs5,512.50 crore into RRVL, a subsidiary of Reliance Industries.
     
    This investment values RRVL at a pre-money equity value of Rs4.285 lakh crore. ADIA's investment will translate into a 1.20% equity stake in RRVL on a fully diluted basis.
     
    With this investment, RRVL has raised Rs37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in less than four weeks.
     
    Mukesh Ambani, Chairman and Managing Director of Reliance Industries, said, "We are delighted with ADIA's current investment and continued support and hope to benefit from its strong track record of over four decades of value creation globally. The investment by ADIA is a further endorsement of Reliance Retail's performance and potential and the inclusive and transformational New Commerce business model that it is rolling out."
     
    Hamad Shahwan Aldhaheri, Executive Director of the Private Equities Department at ADIA, said, "Reliance Retail has rapidly established itself as one of the leading retail businesses in India and, by leveraging both its physical and digital supply chains, is strongly positioned for further growth. This investment is consistent with our strategy of investing in market leading businesses in Asia linked to the region's consumption-driven growth and rapid technological advancement."
     
    Established in 1976, ADIA is a globally-diversified investment institution that prudently invests funds on behalf of the Government of Abu Dhabi through a strategy focused on long-term value creation. ADIA has invested in private equity since 1989 and has built a significant internal team of specialists with experience across asset products, geographies and sectors.
     
    Reliance Retail Limited, a subsidiary of RRVL, operates India's largest, fastest growing and most profitable retail business serving close to 640 million footfalls across its 12,000 stores nationwide.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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