Concerned about the low recovery prospects, a large section of fixed deposit holders, especially those in the retail category, are likely to vote against the distribution mechanism in the resolution plans for Dewan Housing Finance Corporation Ltd (DHFL).
“We will vote against the plans and we hope that the stance helps to strengthen our case in the court,” said Vinay Kumar Mittal, a lead petitioner in the court on behalf of the FD holders of DHFL.
“We will not support the plan,” he further said.
FD holders are keen to be repaid in full for their investments in DHFL, while under the distribution mechanism, they will get much lesser, and for many, it would be a negligible amount.
FD holders have admitted claims of about ₹5,500 crore in DHFL.
Four categories
As part of the resolution on distribution mechanism for DHFL, FD holders and non-convertible debenture holders will be divided into four categories based on the value of their admitted claims.
The first category of up to ₹2 lakh will get 100 per cent repayment of the principal under the resolution mechanism.
The second category is between ₹2 lakh and ₹5 lakh, followed by the third category of ₹5 lakh to ₹10 lakh, and the fourth category would be of over ₹10 lakh.
According to Mittal, the recovery for the remaining three categories will be negligible.
Both Piramal and Oaktree have set aside funds for the FD holders in the resolution plans. Voting on the resolution plans is on till January 14.
While the voting share of FD holders, especially retail FD holders, is low in the resolution plan, Mittal is hopeful that it will strengthen their case in court.
The NCLT is hearing a petition of FD holders on DHFL dues and the next hearing is scheduled on January 20.
“We will continue our legal fight,” Mittal stressed.
FD holders are, however, unlikely to join NCD holders after 63 Moons Technologies invited them as well as other NCD holders to join with them in the NCLT Mumbai by filing separate applications for recovery from fraudulent transactions.
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