DHFL vs. Reserve Bank launches insolvency process with NCLT
Mumbai, Ta. 29 November 2019, Friday
The Reserve Bank has initiated an insolvency process with NCLT against the dilapidated Dewan Housing Finance Limited (DHFL). Upon insolvency, the filing of a Debt Ammotatorium application on DHFL has been accepted. DHFL told exchanges last week that the administrator hired by the company would not be able to disclose financial results as it had detailed discussions with statutory auditors.
DHFL had to announce its own results on November 3.
The defaulted DHFL board was superseded by the Reserve Bank of India on November 7. The decision was made by the RBI because of defaults in several payment obligations and administrative deficiencies.
Former CEO of Indian Overseas Bank Subramanian Kumar is currently appointed as the company's administrator. According to the estimates, DHFL has a debt of Rs 5 crore. Of which Rs 5 crore he has to pay to the fixed deposit holders while the banks have to take Rs 5 crore.
Due to the DHFL default, its shareholders have suffered a lot. In September, the DHFL submitted a resolution plan to lenders, asking them to convert debt into equity and give a 3% stake in the company.
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