October 18, 2019

Kotak Mahindra Asset Management, Axis MF Move Bombay HC Against DHFL Seeking Disclosure Of Assets And Liabilities

[ By Bobby Anthony ]

Kotak Mahindra Asset Management and Axis Asset Management have moved the Bombay High Court to seek a direction to beleaguered mortgage lender DHFL to disclose all its assets as well as liabilities.

The companies have also prayed for a temporary restraint on DHFL to prevent it from making further payments or disbursements to secured and unsecured creditors, other than certain payments made on a pro-rata basis to secured creditors.

It may be recalled that recently, the court had restrained DHFL from making further payments or disbursements to any unsecured creditors until further orders.

The court had granted a plea of Reliance Nippon Asset Management (recently renamed Nippon India Mutual Fund) to restrain lenders from disposing of any assets.

Incidentally, a debt resolution plan, approved by the lenders led by Union Bank is awaiting final approval even as the mutual funds are yet to sign the inter-creditor agreement.

The mutual funds would have to sign the inter-creditor agreement (ICA) if the resolution plan has to get going.

This is because as per the Reserve Bank of India's June 7 non-performing asset (NPA) resolution framework, for a resolution plan to be passed, 75% of lenders by value and 60% by numbers must approve it and sign the ICA.

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