Fixed deposit holders at housing finance company Dewan Housing Finance Corporation (DHFL) have voted against all the proposals of the company’s insolvency resolution process. On Friday, Piramal Group emerged as the preferred bidder for DHFL with a Rs 32,750 crore resolution plan. However, this would still mean that FD holders do not get a full repayment on their investments.
There are over 7,500 FD holders, most of who invested their savings in DHFL, and haven’t gotten payments since June 2019. As per the proposed scheme of distribution of dues, FD holders are to get Rs 1,241 crore as against admitted claims of Rs 5,375 crore, only 23% of the amount they have claimed for. Piramal stated in its bid that it would offer 10% over and above the admitted claim amount of the FD holders.
Vinay Kumar Mittal, a lead petitioner on behalf of FD holders in the court says that as a class of creditors, FD holders reject the resolution plan a 100% since they are not getting what they deserve. FD holders now intend to pursue the matter with the National Company Law Tribunal (NCLT). The next hearing, where NCLT is hearing the petition of FD holders on dues, is on January 20.
“Our case in NCLT is very strong. If not successful there we will take it to NCLAT (National Company Law Appellate Tribunal) and then to Supreme Court, but we will fight it. We are confident about winning and courts have always stood by retail FD holders. There are a couple of legal cases also that we will be filing,” Vinay told TNM.
According to the resolution plan, FD holders with deposits wroth Rs 2 lakh or less with get their principal amount repaid in full in cash. This category reportedly makes up for about 70% of the total FD holders.
The second category, which is dues between Rs 2 lakh-10 lakh will reportedly get about 40-43% of the principal dues.
However, FD holders demand that they get every penny that is owed to them. Vinay adds that if FD holders aren’t repaid what they are owed, it will further cause a loss of trust in these investment classes.
“There is already a lack of trust in NBFCs. This will have a negative impact on the financial markets because be it Franklin Templeton or DHFL, people are losing their hard earned money,” he adds.