66 views 2 mins 0 comments

Piramal Group gets RBI Nod for DHFL Acquisition

In Business
February 24, 2021

Piramal Group on Thursday said the Reserve Bank is understood to have cleared the resolution plan for debt-ridden DHFL as approved by the Committee of Creditors (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 the DHFL resolution plan from Piramal Capital and Housing Finance, submitted by the CoC,” Piramal Group said in a statement.

The resolution plan was approved by the CoC in its 18th meeting concluded on January 15, 2021.

Last week, DHFL posted 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 year-ago quarter. Sequentially, the company witnessed widening of net loss from Rs 2,122.65 crore in the second quarter ended September 2020.

In November 2019, the Reserve Bank referred Dewan Housing Finance Ltd (DHFL), the third-largest pure-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 Prior to that, the company’s board was superseded and R Subramaniakumar was appointed as the administrator. He is also the resolution professional under the Insolvency and Bankruptcy Code (IBC).

The company is being investigated by the Ministry of Corporate Affairs from December 2019 through the Serious Fraud Investigation Office (SFIO). The Enforcement Directorate is also probing the company in connection with loans given by it to certain borrowers. The CBI has also initiated investigation in connection with certain loans granted by the company.

Apart from this, CBI is also investigating into the matter of amounts invested by a Uttar Pradesh State Government entity – Provident Fund in the Fixed Deposits of the company.

The financial creditors have claimed outstanding worth Rs 87,031 crore from DHFL. DHFL shares traded 4.94 per cent higher at Rs 18.05 apiece while Piramal Enterprises was up by 0.82 per cent at Rs 1,902.70 in the pre-close session on BSE.