The Piramal group obtains the green light from the RBI for the acquisition of DHFL; shares of mortgage lenders rise 4.94% -Business News, Firstpost

DHFL was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC. Company owes Rs 87,031 crore to financial creditors

Representative workers. Reuters

New Delhi: The Piramal Group said Thursday that the Reserve Bank would have approved the resolution plan for the debt-ridden DHFL as approved by the Creditors Committee (CoC). The CoC had approved a resolution plan submitted by a Piramal group company, Piramal Capital and Housing Finance Limited, last month.

“We understand that the RBI has approved Piramal Capital and Housing Finance’s DHFL resolution plan, submitted by the CoC,” Piramal Group said in a statement. The resolution plan was approved by the CoC at its 18th meeting concluded on January 15, 2021.

Last week, DHFL recorded a consolidated net loss of Rs 13,095.38 crore for the third quarter ended December 2020 against a net profit of Rs 934.31 crore in the quarter last year.

Sequentially, the company saw an increase in net loss of Rs 2,122.65 crore in the second quarter ended September 2020. In November 2019, the Reserve Bank fired Dewan Housing Finance Ltd (DHFL), the third largest pur-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings.

DHFL was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC.

Prior to that, the board of directors of the company was replaced and R Subramaniakumar was appointed as a director. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).

The company has been the subject of an investigation by the Ministry of Commercial Affairs since December 2019 via the Serious Fraud Investigation Office (SFIO). The Enforcement Department is also investigating the company in connection with loans granted by it to certain borrowers.

The CBI has also opened an investigation into certain loans granted by the company.

Apart from this, CBI is also investigating the issue of the amounts invested by an entity of the state government of Uttar Pradesh – the provident fund in the fixed deposits of the company.

The financial creditors demanded an outstanding payment from DHFL worth Rs 87,031 crore.

DHFL shares traded 4.94% up to Rs 18.05 each, while Piramal Enterprises was up 0.82% to Rs 1,902.70 in the pre-close session on the ESB.

About Jamie Collins

Jamie Collins

Check Also

Former chief of China’s top state lender Xiaomin executed for corruption

Lai Xiaomin, the former head of China’s largest state-owned asset management company, was executed on …