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finance | IST

DHFL creditors committee to hold first meeting under IBC on Monday

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The RBI-appointed administrator of DHFL has called for the first meeting of the committee of creditors on Monday. Plans to restart business of the mortgage lender, and the claims submitted against the company are among some of the key discussion points.

The Reserve Bank of India-appointed administrator of stressed financier, Dewan Housing Finance Limited, has called for the first committee of creditors meeting of the company under the Insolvency and Bankruptcy Code (IBC) on Monday, multiple people aware of the development told CNBC-TV18.
DHFL’s creditors, including banks, mutual funds, insurance, and pension funds, among others are all expected to be part of the first meeting on Monday, said a senior banking executive who did not wish to be named. He added that plans to restart business of the mortgage lender, and the claims submitted against the company are among some of the key discussion points.
In parallel, banks are also likely to consider taking the promoters of DHFL, Wadhawans, to the National Company Law Tribunal (NCLT) for their personal guarantee against loans given to the mortgage lender, as per two people involved in the matter.
This comes after the Ministry of Corporate Affairs (MCA) recently extended the scope of the IBC to personal guarantors to corporate debtors effective December 1, 2019. "The personal guarantee claim will run parallel to the CIRP (Corporate Insolvency Resolution Process), and in the same court," said a senior executive involved in this case.
The promoters of DHFL have given personal guarantees for over Rs 82,000 crores of loans on the books of the company, including on secured non-convertible debentures of Rs 42,344 crore; on bank term loans for Rs 31,975 crore; on term loans from National Housing Bank worth Rs 2,435 crore; and Rs 2,807 crore on foreign debt, as per the company’s annual report for 2019.
Another executive involved in the insolvency process for DHFL told CNBC-TV18 on the condition of anonymity that the company has received claims worth Rs 86,892 crores from financial creditors alone, and another Rs 60.76 crores from operational creditors, Rs 2 crores from employees and workmen, and Rs 950 crores from other creditors.
DHFL is the first financial services company to be admitted into NCLT under the Insolvency and Bankruptcy Code for resolution under the newly introduced Section 227 of the IBC. The board of DHFL was superseded by the RBI earlier in November owing to governance concerns and defaults in repayments by the company, and sent to the NCLT thereafter.
R Subramaniakumar, the former managing director and CEO of Indian Overseas Bank, has been appointed as the administrator for DHFL by the RBI, and he is being advised by a three-member panel including Rajiv Lall, non-executive chairman, IDFC First Bank, NS Kannan, managing director and CEO at ICICI Prudential Life Insurance, and NS Venkatesh, chief executive of the Association of Mutual Funds in India.