Piramal Group says NCLAT order not to affect DHFL acquisition; to contest order in apex court

Piramal Group in a statement on 28 January 2022 said that the NCLAT order on DHFL resolution is limited to the extent of challenging the distribution of proceeds (if any) from fraudulent transactions to the benefit of the Resolution Applicant, and that DHFL acquisition by Piramal Group remains unaffected and the business integration continues as envisaged.

“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,” the Company said in a statement.

The National Company Law Appellate Tribunal (NCLAT) has asked the Committee of Creditors of DHFL to reconsider the term in the resolution plan that ascribing Re 1 value to Rs 40,000 crore worth of recoverable assets in the DHFL case.

The appellate tribunal passed the order in an appeal filed by 63 Moons, which had NCD of the face value of Rs 200 crore in DHFL. With this order, the CoC will have to now reconsider the provision of section 66 of IBC which mandates that the benefit should go to all the creditors of DHFL.

In its resolution plan, Piramal had ascribed Re 1 value against Rs 40,000 crore assets that has been fraudulently diverted by erstwhile promoters of DHFL.  

The NCLAT in its order rejected Piramal Group’s argument that the possibility of recovering monies from avoidance transactions is very low.

In September 2021, Piramal Capital & Housing Finance Ltd (PCHL) acquired DHFL for a total consideration of Rs. 34,250 crore. PCHFL has retained over 3,000 employees of the DHFL Group and are 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.