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Bankruptcy cases: Setback for DHFL promoter, Jaiprakash Associates’ Manoj Gaur woos lenders
Photo Credit: Reuters

An appeals tribunal has stayed an order by the lower body that had last week asked the administrator of Dewan Housing Finance Corporation Ltd (DHFL) to table a settlement offer from promoter Kapil Wadhawan before lenders.

This came after DHFL's administrator R Subramaniakumar moved National Company Law Appellate Tribunal (NCLAT) on Monday challenging the order of National Company Law Tribunal (NCLT). 

Wadhawan, an accused in the Yes Bank loan bribery case, has proposed many times full payment to creditors including holders of non-convertible debentures and fixed deposits, suggesting no haircuts. 

Creditors led by State Bank of India (SBI) have termed Wadhawan’s proposal as flimsy, replete with misrepresentations and falsehoods, and without financial backing or commitments. 

Billionaire Ajay Piramal-led Piramal group, which received the lenders’ nod for acquisition in January as well as the central bank’s approval the following month, also moved the NCLAT challenging the NCLT order. 

In its appeal, Piramal observed that NCLT had reserved judgment in granting nod to the Piramal resolution plan in January 2021. “Almost five months later, the latest NCLT order will cause havoc with the Insolvency and Bankruptcy Code (IBC) process and, hence, must be stayed,” Piramal said adding that Wadhawan's proposal is neither a settlement offer nor a resolution plan. 

The administrator has also questioned NCLT order’s timing given that the bench is to retire in June and any delay could lead to a situation where the case would have to be re-argued before a new bench. 

The lenders appeal said, “The order has the effect of creating a disruption from the strict discipline of the timelines set out under the resolution process and has the effect of compelling the CoC (committee of creditors) to vote on a settlement proposal offered by Wadhawan, which the CoC in its commercial wisdom had chosen not to.” 

The appeal has sought a direction from the NCLAT to pass an order on the offer by the Piramal group within one week.  

The matter is scheduled to be heard next on June 25. 

DHFL, the first financial services firm to be dragged into bankruptcy on the order of the central bank, owes around Rs 91,000 crore to various creditors which include mutual funds, banks, pension funds, insurance firms and retail investors.

Jaypee Infratech

Bankrupt real estate developer Jaypee Infratech’s promoter has urged lenders to consider a settlement offer first submitted before the Supreme Court in 2019. 

In a letter dated May 23, addressed to insolvency resolution professional Anuj Jain, executive chairman of Jaiprakash Associates Manoj Gaur has proposed to repay the debts without any “haircuts”, by making an upfront payment of Rs 9,783 crore, doing land swap, and via long-term debentures with a total value of about Rs 12,500 crore. 

For homebuyers, Gaur has proposed to deploy Rs 1,650 crore to construct units, of which Rs 400 crore would be upfront. He also claimed the homebuyers would get additional benefits including Rs 2,987 crore compensation for delay, and that fixed deposits and dues of Yamuna Expressway Infrastructure Development Authority would also be paid back in entirety, as per the PTI

Lenders of Jaypee Infratech had yesterday decided to defer vote on the winning resolution plan, giving two more days to Suraksha Group and state-owned NBCC (India) Ltd for filing revised bids. 

On Friday, VCCircle had reported that, after the fourth bidding round, Suraksha held an edge over NBCC in the lenders’ vote that was set to start Monday and last a couple of days.

The troubled township developer has debt of around Rs 22,600 crore under the insolvency process. 

The CoC led by IDBI Bank and homebuyers is scheduled to meet on Thursday and Friday to decide on the resolution plans by NBCC and Suraksha. 

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