SC stays NCLAT order sending Piramal’s winning bid for DHFL to lenders for reconsidering valuation : Rashtra News
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The Supreme Court on Monday stayed the insolvency appellate tribunal NCLAT order in which it had sent back the Piramal Group’s winning bid for DHFL to the debt-laden finance company’s lenders for reconsidering the valuation.
The National Company Law Appellate Tribunal (NCLAT), in January this year, while delivering a judgement on the 63 Moons Technologies petition had directed the lenders of Dewan Housing Finance Corporation Limited (DHFL) to reconsider their decision regarding the valuation of the financial firm’s avoidable transactions, while approving the insolvency resolution plan submitted by Piramal Capital & Housing Finance Ltd.
A bench comprising Chief Justice N V Ramana and Justices Krishna Murari and Hima Kohli agreed to the appeal of the Piramal group challenging the NCLAT’s verdict that had asked the lenders to reconsider the sale terms allowing Piramal to appropriate possible recoveries from past transactions worth Rs 45,000 crore.
The top court has now posted the matter for further hearing on May 5.
Solicitor General Tushar Mehta, appearing for the committee of creditors (CoC), said that most of these transactions by former management DHFL were irregular or fraudulent, and the banks did not expect to get any money out of it.
Under the insolvency resolution proceedings for the crisis-hit DHFL, Piramal Capital had emerged as the winning bidder and the Committee of Creditors (CoC) had ascribed a value of just Re 1 for Rs 45,000 crore-worth recoverable assets of DHFL.
These were assets apparently diverted fraudulently by the erstwhile promoters of DHFL.
NCLAT had sent the approved resolution plan back to the CoC in order to reconsider the aspect of the valuation of avoidable transactions that pertain to the recoverable assets.
Under the Insolvency and Bankruptcy Code (IBC), avoidance transactions are those which are identified as undervalued, fraudulent, or extortionate by the former promoters.
The resolution plan, which was voted in favour by the CoC, was approved by the Mumbai bench of the National Company Law Tribunal (NCLT) on June 7, 2021. As per the plan, a notional value of Re 1 was given for all recoveries under Section 66 of the IBC whereby applications for recovery of assets worth over Rs 45,000 crore were filed by the DHFL administrator.
Section 66, pertains to transactions in connection with fraudulent trading.
According to the NCLAT, avoidance transactions were not factored in the resolution plan, and hence the matter needs to be reconsidered.
In September 2021, Piramal Capital & Housing Finance Ltd (PCHFL) acquired DHFL for a total consideration of Rs 34,250 crore.
PCHFL has retained over 3,000 employees of the DHFL Group and is also adding over 2,000 new jobs in the merged entity.
New origination of Affordable Housing loans has been restarted at all 301 branches across the country, the company statement had said.
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( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a www.financialexpress.com feed.)
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