DHFL news: Look at Wadhawan’s bid for DHFL, says NCLT | India Business News

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MUMBAI: The National Company Law Tribunal (NCLT) has asked the committee of creditors to consider the proposal made by jailed promoter Kapil Wadhawan for DHFL, against which insolvency proceedings were initiated by the Reserve Bank of India (RBI).
Lenders are perplexed with the order as they have agreed to sell the company to Piramal Group after an elaborate process.
Wadhawan had in October 2020 offered his personal and family properties, which he claimed were worth Rs 43,000 crore. Wadhawan had written to the RBI-appointed administrator R Subramaniakumar where he stated that his offer would ensure maximum value for the assets that have been put on the block to repay loans.
“This is unusual. The promoter had written a letter from prison. He is under investigation for fraud and a host of illegalities. We had not voted on it as it was only a letter and we did not feel he was eligible,” said a banker. Bankers have two options — either to go in for an appeal or to have a quick vote and be done with the matter. Lenders are yet to meet on this.
Section 29A of the bankruptcy code explicitly excludes insolvents and wilful defaulters from making a bid as a resolution applicant. While bankers can restructure loans of defaulters if over 90% of them vote for it, this can only be done outside the bankruptcy proceedings.
Withdrawing DHFL from the Insolvency & Bankruptcy Code (IBC) process can be done only by the party that initiated the proceedings. In this case, the party was the RBI and not a creditor. For the RBI, the DHFL insolvency proceedings is a test case as this is the first financial services company against which the insolvency law is being used.
Lenders point out that in the Essar Steel case, the Supreme Court ruling is clear that the decision of the committee of creditors is final. Also, Piramal’s acquisition of DHFL has been approved by both the RBI and the committee of creditors.

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