Payment to creditors was stopped following court orders: DHFL
New Delhi, November 3 () The mortgage debt firm DHFL said Sunday that it suspended payment to its creditors, including holders of fixed deposits, following the instructions of the Bombay High Court.
This clarification came a day after the Secretary General of Congress, Priyanka Gandhi, described the company as delinquent and criticized the UP government for investing the money from the pension fund for employees in such a company.
He wondered who was interested in the interest by investing Rs.2 billion of the money earned with such effort by the employees in that company.
The Honorable Superior Court of Bombay in the case of Reliance Nippon Life Insurance v/s DHFL approved an order on September 30, 2019 and on October 10, 2019 that prohibits the company from making payments to any of its secured/unsecured creditors , including payments to holders of fixed deposits, DHFL said in a regulatory presentation at dusk.
The company continues to have solid collections and adequate liquidity to pay its fixed deposit holders, he said.
However, as a result of the orders and other pending directives of the Bombay High Court, the company cannot make these payments, he added.
The company was making all payments due and interest on all fixed deposits held with the company, on their respective due dates, and there has been no delay in making any payments to the holders of fixed deposits up to the orders, DHFL said.
Although the company faces a liquidity crisis for more than 13 months, it has paid around Rs 44,000 crore for its debt obligations, he added. As the company is working with multiple classes of stakeholders, we would like to state that a debt resolution is essential and, while legal proceedings are pending, the company is proactive and in parallel making every effort to reach a resolution plan with your creditors as soon as possible and end the stalemate among your stakeholders, he said. DP MSS MKJ