On Tuesday, making an about-turn, the Mumbai bench of the National Company Law Tribunal (NCLT) chaired by HP Chaturvedi and Ravikumar Duraisamy, allowed Piramal Group to take over
under the bankruptcy code for as low as Rs 37,500 crore against a claim of close to Rs 85,000 crore.
It had on May 25 asked the committee of creditors to consider the Wadhawans offer of paying back almost Rs 93,000 crore to the lenders and creditors, which was stayed by the NCLAT after the Pirmal group challenged it. But on Monday the bench cleared the Pirmal bid saying they respected the commercial wisdom of the lenders and thus also rejected the former DHFL promoters’ offer to pay back more than 100 per cent of the claims.
Claiming that the resolution plan of the Piramals is contrary to law and against the interest of all DHFL creditors, including NCD holders to whom the bidder offers just Re 1 against their loss of Rs 45,000 crore, 63 Moons said, “They will shortly approach the NCLAT seeking their Rs 200 crore from Piramal and also the rest Rs 45,000 crore for other NCD holders.”
It said the DHFL administrator had sought almost Rs 45,000 crore under Section 66 of the IBC from DHFL’s original promoters and others on account of their fraud against creditors.
63 Moons contends that this Rs 45,000 crore must come to the defrauded creditors. Instead, the resolution plan is drafted in such a way that it favours the buyer (Piramal group), allowing it to reap the benefits of recoveries from the promoters.
“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 Piramal at the cost of the creditors. The Piramal bid is only for the current value of DHFL which does not include these amounts that were taken away fraudulently,” it said.
63 Moons holds over Rs 200 crore of NCDs of DHFL and had filed an application in the Mumbai NCLT seeking recovery benefits of Rs 45,000 crore should go to the creditors, including NCD holders, and not to the buyer of the company.
But strangely, the resolution plans allows the Piramal Group to buy DHFL for a mere Rs 37,500 crore as against the outstanding debt of Rs 85,000 crore, and that the benefits of claims of over Rs 45,000 crore will be appropriated by Piramal just for Re 1, it said.
The irony is that the other members of the committee of creditors, who are mainly 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 65-75 per cent haircut if the plan is approved, it said and wondered why banks are happy with the Rs 37,500 crore offer that too spread out over seven years.
In November 2019, DHFL became the first NBFC to be referred for bankruptcy by the RBI.
