The firm is undergoing a debt resolution process under IBC rules
With the NCLT asking lenders of DHFL to consider a settlement offer from its former promoter, Manoj Gaur, Executive Chairman of Jaiprakash Associates Ltd, has now written to the insolvency resolution professional at Jaypee Infratech Ltd offering a similar plan to pay dues in full.
Writes to RP
“I am not able to comprehend how and why the lenders have been unwilling to accept our proposal and are continuously putting resolution plans to vote which entails exorbitant haircuts. This is astonishing especially when the asset value of JIL is far greater than the debt owed to the creditors, partly due to the efforts by me and JAL to reduce such liabilities,” Gaur said in the letter. This is similar to the proposal sent by Dheeraj Wadhwan, former promoter of DHFL. Wadhwan had also claimed that the lenders were not giving his offer due consideration before he filed a petition in the NCLT.
But legal experts said such proposals from former promoters of defaulting companies have no sanctity under the IBC rules. Recently, lenders allowed an offer by C Sivasankaran to retake control of his company by paying an amount higher than the liquidation amount. But in that case there were no bidders for his company.
Bharat Chugh, Independent Counsel and former judge, said these settlements may create perverse incentives for defaulters who can get away with a mere rap on the knuckles after defaulting on millions of dollars worth of loans, which is all public money. This would neither lead to responsible banking and lending, nor responsible repayment, and creates a bad precedent.