Money & Banking

DHFL lenders begin voting on proposals for redistribution of funds to small investors

Surabhi | | | Updated on: Dec 05, 2021

FILE PHOTO: A woman walks past a signboard of Dewan Housing Finance Corporation Ltd. (DHFL) outside its office on the outskirts of Mumbai, India, January 31, 2019. REUTERS/Francis Mascarenhas/File Photo | Photo Credit: FRANCIS MASCARENHAS

The total outgo for lenders of DHFL on these proposals will be ₹1,853.21 crore

Lenders to Dewan Housing Finance Corporation Ltd have begun voting on new proposals for redistribution of funds to small investors, including fixed deposit and NCD holders as well as pension funds.

According to the proposal put forward for voting, the entire admitted claim of ₹39 crore of Army Group Insurance Fund, ₹72.93 crore of Air Force Group Insurance Society and Navy Children School of ₹2.54 crore will be paid fully in cash.

Further, it has also been proposed that all fixed deposit holders will be paid additional amounts in cash in order to ensure that the entire amount paid to them is about 40 per cent of the admitted claims, similar to the recovery to secured financial creditors.

Unsecured NCD holders have been categories based on their investments in four categories: up to ₹2 lakh, between ₹2,00,001 and ₹5 lakh, between ₹5,00,001 and ₹10 lakh, and those above ₹10 lakh.

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Unsecured NCD holders with investments up to ₹10 lakh will be repaid 40 per cent of the admitted claims like in the case of fixed deposit holders.

Investors not happy

The total outgo for lenders of DHFL on these proposals would be ₹1,853.21 crore.

However both NCD holders and fixed deposit investors of DHFL continue to be unhappy with the proposals. NCD holders up to ₹10 lakh believe that their repayment under the new proposal will be lower than before.

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The NCLT, while approving the resolution plan for DHFL on June 7, had asked the Committee of Creditors to reconsider the distribution of funds to fixed deposit holders and provident funds within two weeks, noting that they had deposited their hard-earned savings and are now facing difficulties amongst the Covid-19 pandemic and job losses.

Published on June 21, 2021
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