The latest resolution proposing higher payouts to unsecured creditors including Axis Bank, Yes Bank and L&T Finance has been vehemently rejected by the committee of creditors (CoC) of Dewan Housing Finance Ltd (DHFL). From the copy of the results Moneylife has accessed in the Smartroom portal, an overwhelming 93.63% of the financial creditors have voted against the proposal while a mere 3.63% voted in favour of the proposal and 2.74% abstained from voting. At least 66% of the financial creditors must vote in favour of such a proposal for it to be passed.
As per the latest proposal, unsecured financial creditors (FCs), which also include Axis Bank, YES Bank and L&T Finance, were to be paid 40% of their claimed amount. Had this resolution been passed, the recovery percentage for them would have been almost similar to the recovery of the secured FCs who voted in favour of the January 2021 resolution plan.
The fresh round of voting
was called for after the National Company Law Tribunal (NCLT) held that the prayer sought by Axis Bank, YES Bank and L&T Finance should be merged with the resolution plan approval order which came on 7th June. It had also directed the CoC of DHFL 'to reconsider the distribution mechanism' for the applicants 'as per its commercial wisdom'.
The CoC met on 5th July to discuss the proposal and decided to go ahead with a new round of voting. All other provisions of the original redistribution plan were kept the same.
Interestingly, according to the proposal, while unsecured creditors, which include Axis Bank, YES Bank and L&T Finance who had approached NCLT with the prayer petition, would have recovered 43%, recovery for fixed deposit holders (who are also unsecured in a way), would have remained at about 23%. Many secured NCD (non convertible debentures) holders too are set to make a loss of 65% to 75% of their invested amounts. Most fixed deposits are held by middle class people and senior citizens who had invested in DHFL fixed deposits in the hope of gaining extra interest.
Fixed deposit holders and NCD holders have also voted against the controversial proposal.