NCLT sets up monitoring panel for DHFL until Piramal Group’s resolution plan is implemented – The Financial Express

Clipped from: https://www.financialexpress.com/industry/insolvency-case-nclt-sets-up-monitoring-panel-for-dhfl-until-piramal-groups-resolution-plan-is-implemented/2270700/

The appointment of monitoring committee is typically done for the smooth implementation of the resolution plan. However, some experts are surprised at the appointment of observer cum permanent invitee in the DHFL monitoring committee.

While other members will be nominated, NCLT has named former chief commissioner of Income Tax Ashok Kacker as the observer and permanent invitee of the committee.

The Mumbai bench of NCLT has ordered constitution of a monitoring committee for DHFL until Piramal Group’s resolution plan is implemented. In a written order made public on Sunday, NCLT said 7-member monitoring committee would comprise DHFL administrator, three representatives from CoC, two members from the successful resolution applicant (PCHFL), and an observer cum permanent invitee.

While other members will be nominated, NCLT has named former chief commissioner of Income Tax Ashok Kacker as the observer and permanent invitee of the committee.

NCLT had approved Piramal Capital and Housing Finance’s Rs 37,250 crore resolution plan on June 6.

The appointment of monitoring committee is typically done for the smooth implementation of the resolution plan. However, some experts are surprised at the appointment of observer cum permanent invitee in the DHFL monitoring committee.

Ashish Pyasi associate partner Dhir & Dhir Associates said insolvency and bankruptcy code (IBC) is silent on additional conditions which can be put for monitoring the implementation of the plan. “In this case it seems that because of the stakes involved and lots deposit holders are there, authority thought it appropriate to put additional condition by appointing a person who will be attending the meetings as an observer,” Pyasi said.

The court has also asked the creditors committee to reconsider the distribution of resolution funds for fixed deposit holders within two weeks’ time from June 6. The court has also made clear that there is no additional monetary obligation for PCHFL.

“Its generally considered that investment in Fixed Deposit, NCDs are low-risk investment than investing in equity shares, therefore, these small investors should not be put to more risk, take more hair cut than the stronger financial institutions viz banks, financial Institutions and accordingly for this limited purpose we direct the COC to reconsider their distribution method, distribution amongst various members of CoC within two weeks from today and report the same to this adjudicating authority,” NCLT said in ts order on June 6.

FD holders are however, planning to move higher courts against NCLT order. Vinay Kumar Mittal, a lead petitioner in the court on behalf of FD holders had earlier told FE that depositors will move the NCLAT as well as the Supreme court, if required, to get the full amount back.

DHFL has total admitted claims of Rs 87,082 crore. State Bank of India (SBI) is the lead creditor to DHFL with admitted claims of Rs 7,170 crore.

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