The Piramal Group on Friday said it is planning to move the Supreme Court to appeal against an order by insolvency appellate tribunal NCLAT, which sent back its winning bid for DHFL to the debt-laden finance company's lenders for reconsidering the valuation.
Piramal Capital & Housing Finance Ltd in a statement said that "the Dewan Housing Finance Corporation Ltd (DHFL) acquisition by Piramal Group remains unaffected and the business integration continues as envisaged".
The National Company Law Appellate Tribunal (NCLAT) on Thursday, while delivering a judgement on 63 Moons Technologies petition had directed the lenders of DHFL to reconsider their decision regarding the valuation of the financial firm's avoidable transactions, while approving the insolvency resolution plan submitted by Piramal Capital & Housing Finance Ltd.
"We have analyzed the detailed judgment of the NCLAT and consulted our legal advisors.
"We are confident and will continue to pursue the matter as multiple legal options are available to us for our future course of action, including approaching the Apex court," said a statement issued by Piramal Capital & Housing Finance Ltd (formerly known as DHFL).
Under the insolvency resolution proceedings for the crisis-hit DHFL, Piramal Capital had emerged as the winning bidder and the Committee of Creditors (CoC) had ascribed a value of just Re 1 for Rs 45,000 crore-worth recoverable assets of DHFL.
These were assets apparently diverted fraudulently by the erstwhile promoters of DHFL.
NCLAT has now sent the approved resolution plan back to the CoC in order to reconsider the aspect of the valuation of avoidable transactions that pertain to the recoverable assets.
Under the Insolvency and Bankruptcy Code (IBC), avoidance transactions are those which are identified as undervalued, fraudulent or extortionate by the former promoters.
The resolution plan, which was voted in favour by the CoC, was approved by the Mumbai bench of the National Company Law Tribunal (NCLT) on June 7, 2021.
As per the plan, a notional value of Re 1 was given for all recoveries under Section 66 of the IBC whereby applications for recovery of assets worth over Rs 45,000 crore was filed by DHFL administrator.
Section 66, pertains to transactions in connection with fraudulent trading.
According to the NCLAT, avoidance transactions were not factored in the resolution plan and hence the matter needs to be reconsidered.
In September 2021, Piramal Capital & Housing Finance Ltd (PCHFL) acquired DHFL for a total consideration of Rs 34,250 crore.
PCHFL has retained over 3,000 employees of the DHFL Group and is also adding over 2,000 new jobs in the merged entity.
New origination of Affordable Housing loans has been restarted at all 301 branches across the country, the statement said.
Photograph: Francis Mascarenhas/Reuters
