63 moons to challenge the NCLT order Piramal to take over DHFL
63 moons to challenge the NCLT order Piramal to take over DHFL

Jignesh Shah-led 63 Moons Technologies will be challenging the National Company Law Tribunal (NCLT) order that allowed Piramal Group to take over Dewan Housing Finance Corporation (DHFL) .The Mumbai Bench of the NCLT on Monday (June 7) approved Piramal Group’s resolution plan for DHFL.

63 Moons Technologies alleged that the current resolution plan is against the Insolvency and Bankruptcy Code (IBC) and also against the interest of DHFL's creditors including NCD holders. 63 Moons holds NCDs of DHFL which is worth more than Rs 200 crore.

Piramal Capital, which has already received approval from the Competition Commission of India (CCI) and Reserve Bank of India, has bid DHFL for Rs 34,250 crore. The current DHFL resolution plans allows the Piramal Group to buy the company by paying mere Rs 37,500 crore as against the outstanding debt of Rs 85,000 crore, stated 63 Moons Technologies.

Meanwhile, 63 Moons Technologies filed an application in the NCLT Mumbai seeking that the fraudulent transaction recovery benefit of approximately Rs 45,000 crore filed by DHFL administrator under section 66 of IBC should come to creditors, including NCD holders and not to the buyer of the company.

The DHFL administrator filed applications for recovery of almost Rs 45,000 crore under Section 66 of the IBC against DHFL's promoters and other persons on account of their fraud against the creditors.

“Contention of 63 Moons is that this amount of Rs 45,000 crore must come to the defrauded parties, which are the creditors. Instead, the Resolution Plan is drafted in such a way that it favors the resolution applicant (buyer), in this case Piramal Group, allowing it to reap the benefits of recoveries from the promoters.”

The company further stated creditors should get Rs 45,000 crore, not Re 1 given by Piramal for fraudulent transaction recovery. “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 the buyer (Piramal) at the cost of creditors. Piramal has bid only for the current value of DHFL which does not include these amounts that were taken away fraudulently. Hence, all the more reason, the recoveries must come to the creditors only,” stated 63 Moons Technologies.

Recently, DHFL posted a consolidated net loss of Rs 13,095.38 crore in the third quarter ended December 2020 against a net profit of Rs 934.31 crore in the year ago quarter. Sequentially, the company witnessed widening of net loss from Rs 2,122.65 crore in the second quarter ended September 2020.

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