HDIL Submitted PMC Bank Pay Orders Worth Rs96.50 Crore to Bank of India for OTS
Moneylife Digital Team 25 September 2019
The restrictions imposed on PMC Bank by Reserve Bank of India (RBI) is bringing out more details about the dealings of the lender with shady corporations which may have been at the behest of the promoter group of the Bank. 
 
 In one such dealing on 31 August 2019, Sarang Wadhwan, promoter of Housing Development and Infrastructure Ltd (HDIL), submitted two pay orders worth Rs96.50 crore as part of its one-time settlement (OTS) with Bank of India (BoI). 
 
Interestingly, this was soon after the interim resolution professional (IRP) appointed by HDIL asked home-buyers to submit their claims for dues before 8 September 2019, as per the order from the National Company Law Tribunal (NCLT). 
 
The letter sent by BoI's treasury branch acknowledges receipt of a letter from Mr Wadhwan dated 31 August 2019 along with two pay orders in original. Both the pay orders have drawee bank as PMC Bank. First pay order number 384465 is dated 26 August 2019 for Rs46.50 crore, while the other with a number 384477 dated 30 August 2019 for Rs50 crore.
 
The letter from Bank of India signed by SK Roy, assistant general manager, says, "Pending a decision on the company (HDIL)'s OTS proposal by the competent authority of our bank, we give our concurrence for keeping the CIRP proceedings in abeyance for a period of 2 weeks."
 
Were these pay orders part of an over draft facility provided to HDIL? Or were they part of business transactions and out of HDIL’s funds available with the Bank?
 
There are also reports that the HDIL group itself has a large shareholding in the Bank. None of this is verified as yet. 
 
 
In the subject line, the BOI letter mentions its investment in non-convertible debentures of HDIL and its application submitted before the National Company Law Tribunal (NCLT), Mumbai.
 
HDIL's downfall is a pointer to the crisis the realty sector is going through.
 
On Wednesday, HDIL shares plunged 5% to hit an all-time low of Rs4.50 on the BSE.
 
The IRP made the public announcement under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
 
The NCLT had earlier passed an order saying that the cash-strapped HDIL will face insolvency proceedings under the provisions of the IBC. The order came in response to a plea filed by public sector lender Bank of India.
 
Bank of India had filed an application with the Mumbai bench of the NCLT after the realtor failed to repay dues to the tune of Rs522 crore. Besides Bank of India, HDIL also faces resolution pleas by Corporation Bank, Syndicate Bank, Indian Bank and Dena Bank.
 
In a regulatory filing to the BSE, the Mumbai-based realtor had said that it has been admitted under the provisions of IBC as per an order passed by the NCLT pursuant to an application filed by Bank of India under Section 7 of IBC.
 
The company also informed the exchange that it planned to challenge the NCLT order, adding that it was under the process of filing an appeal with the National Company Law Appellate Tribunal (NCLAT).
 
"The company is under the process to file an appeal with NCLAT against the order passed by the National Company Law Tribunal," HDIL had said in the regulatory filing.
 
HDIL further stated that an IRP has been appointed to carry out the functions as mentioned under the IBC.
 
 
Comments
TIHARwale
2 years ago
Nothing will happen to Sharad the closet ally of rich and powerful, at a function in Parliament, Narendra Modi himself walked up to greet Pawar and complained why he wasn't coming to see old friends like him.
kiran
2 years ago
One director of PMC bank is a crony of the Wadhwans since long time and was on the boards of both HDIL & DHFL till 2015.
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