Fighting tooth and nail for all creditors of DHFL, 63 moons technologies has objected to the Piramal Group at the National Company Law Appellate Tribunal (NCLAT) for ascribing just Re 1 to Rs 45,000 crore recoverable assets from the Dewan Housing Finance Ltd (DHFL) and its promoters.
Notably, Piramal Capital and Housing Finance Ltd has ascribed only a sum of Re 1 to Rs 45,000 crore worth of potential recoveries from DHFL promoters.
In its petition, the Mumbai-based fintech company has urged the NCLAT to ensure that the proposed recovery of Rs 45,000 crore from Wadhawans and their associates and companies must benefit only creditors and not unjustly enrich a resolution applicant like Piramal Group.
63 moons prayed to the NCLAT, saying: "Piramal Group does not get to pocket the potential Rs. 45,000 crore that Piramal Capital and Housing Finance Ltd may recover from the Wadhawans."
It noted that the Rs 45,000 crore is from fraudulent transactions undertaken by DHFL and Wadhawans that are to be recovered from them and their associates and companies.
"The creditors are taking a minimum haircut of 65 per cent in the Piramal Resolution Plan, but to have recoveries of their own money which was fraudulently taken away from them for a paltry sum of Re 1 is just rubbing salt on the wound," said 63 moons.
Last month, the Mumbai bench of NCLT approved the Piramal Group's resolution plan for DHFL.
According to the Piramal Resolution Plan, the creditors who have been defrauded gain nothing from any such recoveries and all the benefit would go to Piramal. "A further egg in face for the creditors is Piramal ascribing only a value of Re 1 to these recoveries which might be upwards of Rs 45,000 crore," it added.
63 moons technologies, which holds over Rs 200 crore of non-convertible debentures (NCDs) of DHFL, has described the current resolution plan as disappointing for NCD holders.
The company has approached the NCLAT to challenge the NCLT's nod for Piramal's resolution plan.
The NCLAT has already issued notices to the committee of creditors (CoC), the administrator of DHFL and Piramal Capital and Housing Finance Ltd on a plea by 63 moons against the DHFL resolution plan approved by NCLT.
The administrator of DHFL has 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.
63 moons contended that Rs 45,000 crore must come to the defrauded parties, which are the creditors. However, the Resolution Plan was drafted in such a way that it favoured the resolution applicant (buyer) -- the Piramal Group, allowing it to reap the benefits of recoveries from the promoters.
"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," it said, adding that 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.
At the NCLAT, 63 moons sought that the fraudulent transaction recovery benefit of approximately Rs 45,000 crore filed by the DHFL administrator under section 66 of IBC should come to creditors, including NCD holders who are the actual sufferers of the default, and not to the buyer of the company.
Interestingly, the current DHFL resolution plan allows the Piramal Group to buy the company by paying Rs 37,500 crore as against the outstanding debt of Rs 85,000 crore. In addition to this, the benefits of claims of over Rs 45,000 crore are to be appropriated by Piramal fully by ascribing the entire recoverable amount a value of Re 1.
Other members of the Committee of Creditors, comprising mainly banks, have recourse to personal guarantees of promoters whereas NCD holders do not have any such contractual recourse.
"NCD holders will be left high and dry with a massive 65 per cent to 75 per cent haircut, if in future such recoveries from fraudulent transactions are allowed to pass through to the resolution applicants, instead of the creditors," it noted.
63 moons technologies will now argue the matter before the NCLAT on July 19.