Has DHFL’s Resolution Plan Suffered A Setback? NCLAT Asks CoC To Reconsider

The principal valuation of recoverable assets are set to be around Rs 38,000 crore, however, it has been valued at Rs 1 to benefit Piramal Capital and Housing Finance, said report

Knight Frank, an independent body that had valued each and every project of DHFL, had set a value of Rs 40,000 crore. Image: Getty

Mumbai: In a latest development, the National Company Law Appellate Tribunal (NCLAT) has recently asked the committee of creditors (CoC) of DHFL to reconsider Piramal Capital and Housing Finance assigning a value of only Rs 1 to the bad loans of the bankrupt mortgage lender that Piramal acquired last year.

According to the report, the principal valuation of recoverable assets are set to be around Rs 38,000 crore, however, it has been valued at Rs 1 to benefit Piramal Capital and Housing Finance.

There are many properties (developed, underdeveloped, and huge land bank) of DHFL placed all over the country which includes property in Pali Hill, BKC, plots in Juhu, Juhu Galli SRA project, huge agricultural land in Pune, and other places. All these properties have been valued at Rs 1.

According to the court order, the value of the property has been suppressed. The then promoter of DHFL had also written several letters to the RBI-appointed administrator.

Knight Frank, an independent body that had valued each and every project of DHFL, had set a value of Rs 40,000 crore.

A division bench comprising judges M Venugopal and V P Singh said, “The resolution plan be sent back to the CoC for reconsideration on this aspect.”

In its petition, 63 Moons questioned the ‘commercial wisdom’ of the CoC in approving the resolution plan. Assigning a value of Rs 1 means that the amount will be written off by the lenders and recovery, as and when it happens, will be credited to the resolution applicant Piramal Group, it pointed out.

Piramal Enterprises bought DHFL for Rs 34,250 crore. The wholesale book portfolio of DHFL has been grossly undervalued at Rs 9,000 crore as of March, 31, 2021. A significant part of DHFL’s assets were thus locked in the avoidance applications such as luxury residential towers such as 36 West at Worli, projects with immense development potential like Juhu Galli.