on Jun 24, 2021)Mumbai: DHFL lenders have voted against a proposal to distribute to small investors in the bankrupt housing finance companies more than what they were legally entitled. The resolution to pay out around Rs 1,800 crore more to small investors and funds representing them was taken up to comply with the order of the National Company Law Tribunal (NCLT).
The tribunal, while approving the resolution plan submitted by
, was sympathetic to the claims of small investors but could not do much under the law. In terms of the bankruptcy law, those who vote against a resolution proposal are entitled only to the liquidation value.
According to legal experts, more than the payout, lenders are worried about opening the doors for other categories of claimants as many other institutional investors are ultimately representing small investors. Fresh litigation could then derail the resolution process, which is already subject to several pending litigations.
The resolution, on which the lenders voted this week, would have them pay the Army Insurance Group Fund, Air Force Group Insurance Society and The Navy Children’s School in full as suggested by the NCLT. This will result in an additional Rs 86-crore outgo for the lenders.
It also proposes that all fixed deposit (FD) holders get 40% of their admitted claims, which is in line with the recovery for secured creditors, resulting in an additional payout of Rs 965 crore.
In terms of the approved resolution plan, FD holders would have got a pittance as they are dissenting creditors and entitled to only their share of liquidation value.
