According to 63 Moons, if banks accept 37-40 per cent recovery and take the rest by invoking personal guarantees of the erstwhile promoters, the NCD and FD holders will have to forgo as much as 60 per cent of their principle amount which is contrary to law.
Unless the Non-Convertible Debenture (NCD) and Fixed Deposit (FD) holders file separate applications seeking refund from the recovery, they will have to take haircut to the tune of Rs 50,000 crore since under the current insolvency process lenders have the first right over their exposure, 63 Mooons said in a statement.
The NCD and FD holders have the largest exposure to the crippled company at Rs 45,000 crore, followed by banks at Rs 35,000 crore and others have an exposure of Rs 5,000 crore.
"So, we want the NCLT to rule that the recovery of siphoned off money should go to all creditors, including banks, NCD and FD holders and all other and not the new buyer of DHFL," the statement said.
NCD and FD holders will be left high and dry with a massive 65-75 per cent haircut (Rs 50,000-60,000 crore) if future recoveries from fraudulent transactions which are to the tune of Rs 30,000 crore, are allowed to pass to the buyer, instead of all creditors, it added.
A forensic audit by Grant Thornton found that erstwhile promoters of DHFL had siphoned of around Rs 30,000 crore.
Various suitors like US-based private equity major Oaktree Capital, Adanis and Piramal Enterprises have submitted bids for Rs 35,000-Rs 37,000 crore to take over DHFL. The bids were opened on December 22 and the creditors are reviewing them.
63 Moons, which holds around Rs 200 crore of NCDs of DHFL, has already filed an application in the NCLT seeking payback. Its application is likely to be heard next week.
"Strangely, current resolution plans say this recovery will go to the buyer, who will be paying a mere Rs 35,000 crore as against the actual debt of Rs 85,000 crore, which means a straight Rs 50,000 crore write-off/ loss to creditors.
"If the NCLT rules in favour of creditors, then they can get a minimum of Rs 65,000 crore from the additional benefit realised from fraudulent transaction recovery. And if the buyer increases the bid, creditors could get more," it noted.
As per 63 Moons, recoveries from erstwhile promoters -- the Wadhwans -- are not uncertain as they have publicly made it clear that they have assets worth over Rs 40,000 crore. But under the present application, the buyer seeks to take huge advantage by rendering NCD and FD holders to fend for crumbs.
Stating that current resolution plans violate the IBC and is disappointing for NCD and FD holders who stand to bear the maximum losses, 63 Moons said this is because other creditors, who are mainly banks, have recourse to personal guarantees of the promoters while NCD and FD holders do not have any such contractual recourse.
The NCLT is going to hear 63 Moons'' plea on January 13, and the CoC is to vote on the resolution plans the next day.
In November 2019, the Reserve Bank referred DHFL to the NCLT (National Company Law Tribunal) for insolvency proceedings. It was also the first NBFC to be referred to the NCLT by the RBI using special powers under Section 227 of the IBC.
Its large lenders are SBI, including SBI Singapore with Rs 10,083 crore exposure. Others are Bank of India (Rs 4,125 crore), Canara Bank (Rs 2,681 crore), NHB (Rs 2,434 crore), Union Bank (Rs 2,378 crore), Syndicate Bank (Rs 2,229 crore), Bank of Baroda (Rs 2,075 crore), Indian Bank (Rs 1,552 crore), Central Bank (Rs 1,389 crore), IDBI Bank (Rs 999 crore) and HDFC Bank (Rs 361 crore).
DHFL had total assets amounting to Rs 79,800 crore as of March 2020, as per its annual report. Of these, Rs 50,227 crore of assets forming 63 per cent of the total portfolio were reported as gross NPAs.