By Ankur Mishra
The Reserve Bank of India (RBI) was by no means in favour of thinking of Kapil Wadhawan’s settlement present for Dewan Housing Finance Corporation (DHFL). The regulator’s stance was made clear in the course of RBI’s submission ahead of the Mumbai Bench of the National Company Law Tribunal (NCLT) on January 15, 2021. On Tuesday, the regulator’s submission was study by the counsel of the Committee of Creditors (CoC) at National Company Law Appellate Tribunal (NCLAT), exactly where the reduced court’s order was set aside.
RBI, in its submission at NCLT Mumbai on January 15, 2021, had stated, “Affording the applicant (Kapil Wadhawan) even an opportunity of presenting a settlement offer may amount to permitting the applicant to take benefit of its own wrong, which lead to the complete downfall of DHFL and resultantly, the various stakeholders.”
The Reserve Bank’s stance is crucial as the regulator had referred DHFL for insolvency proceedings. DHFL is the 1st monetary services firm to be sent to the bankruptcy tribunal following the government notified the guidelines for referring monetary services providers (FSPs) on November 15, 2019. Unlike insolvency proceedings for organizations from other sectors, an FSP creditor or debtor can not method the tribunal with out becoming referred by a regulator.
The regulator also raised concern on the alleged severe offences by Wadhawans and stated, “It is pertinent to mention herein that the applicant is the ex-promoter of DHFL against whom various proceedings, civil and / or criminal, have been filed, alleging cheating, fraud, siphoning of funds and such other serious offences. The applicant is presently in judicial custody and most regulatory agencies like CBI, EoW, ED etc. are at present investigating against the applicant. This being so, affording the applicant even an opportunity of presenting a purported settlement offer may amount to permitting the applicant to take benefit of its own wrong, which led to complete downfall of DHFL and resultantly, various stakeholders.”
The lenders of DHFL had been shocked by the NCLT’s May 19 order, asking them to take into consideration ousted promoter Kapil Wadhawan’s present for the firm. The order from the tribunal came as a surprise for lenders as they had currently authorized a bid of Rs 34,250 crore from Piramal Capital and Housing Finance (PCHFL) for the troubled mortgage lender. Wadhawan had earlier proposed a settlement program of Rs 91,158 crore, claiming he would repay one hundred% of the principal to all the creditors. The settlement present was rejected by the lenders in which he had proposed to repay lenders by promoting his assets.
DHFL has been undergoing insolvency proceedings at NCLT in Mumbai considering that December 3, 2019. The troubled mortgage lender has admitted claims of `87,120 crore, with State Bank of India (SBI) being the lead creditor. While bondholders have claimed Rs 45,550 crore, monetary creditors have sought Rs 41,342.23 crore from the mortgage financier.
Emails sent to RBI, DHFL administrator, and SBI did not elicit any response till the time of going to press.