Kapil Wadhawan offers family assets of Rs 43,000 crore to repay DHFL lenders
Kapil Wadhawan, the imprisoned developer of Dewan Housing Finance Corp. Ltd., in crisis, offered to put up for sale family assets worth Rs 43,000 crore to repay lenders.
The offer would guarantee maximum value for the assets, Wadhawan wrote to Reserve Bank of India-appointed administrator R Subramaniakumar on October 17, 2020. He and his brother Dheeraj Wadhawan are currently being held in Taloja prison near Mumbai.
“The former DHFL management has made every effort to resolve the financial stress facing DHFL,” Wadhawan said in the nine-page letter. “This letter is one more effort in furthering our resolve.”
Wadhawan proposed the transfer of right, title and interest in various projects to enable proper and complete resolution of DHFL and maximize property value. The valuation of these projects, including the Juhu Galli project and the Irla project, is around Rs 43,879 crore, that too at a 15% lower market value, he said in the letter.
After the IL&FS crisis in September 2018, not only DHFL but all NBFCs faced a major financial crisis, Wadhawan said in the nine-page letter. According to him, DHFL took various measures and repaid Rs 44,000 crore by monetizing assets such as Aadhaar Housing Finance Ltd, Avanse Financial, DHFL Pramerica Asset Managers and DHFL Pramerica Trustee Ltd.
On June 7, 2019, RBI issued a circular on the “Prudential Framework for Resolution of Stressed Assets,” and the process of restructuring DHFL’s debt and resolving its financial strains began. An intercreditor agreement was signed on July 5, 2019, between the banks and certain lenders. The exposure of the lenders who signed the ICA was Rs 39,000 crore. Even today, DHFL’s collection is between Rs 10,000 crore and 15,000 crore and is available to repay lenders, Wadhawan said in the letter.
Last week, Adani Group, Piramal Enterprises and two other entities filed bids for DHFL, the leading insolvency financial services player, according to sources. US firm Oaktree Capital and Hong Kong-based SC Lowy submitted bids for DHFL on Oct. 17, the deadline for submitting final bids, the sources said.
RBI in November last year referred DHFL, the third-largest pure-play mortgage lender, to the National Company Law Court for insolvency proceedings.
According to a document filed last month, fraudulent transactions worth Rs 17,394 crore were reported to DHFL between 2006-07 and 2018-19, according to a report by transaction auditor Grant Thornton. The embezzlement of funds by the DHFL promoters led the lenders to classify the DHFL account as “fraud”.
Further fraudulent transactions worth Rs 12,705.53 crore were reported by the forensic audit, followed by the third earlier this month. The third fraud valued at Rs 2,150.84 crore, by undervaluing the insurance subsidiary of the company, was detected by Grant Thornton.