Rs 4,100 cr UP PF scam: DHFL refers to HC order for stalled repayment

Amid the controversy on the alleged unauthorised investment of provident fund (PF) corpus of Uttar Pradesh Power Corporation (UPPCL), employees in Dewan Housing Finance Corporation (DHFL), asserted it had already made provisions in cash flows for payment of fixed deposits maturing in December 2019. However, DHFL underlined that the Bombay High Court had passed an order restraining the company from making payments to any of its secured/unsecured creditors, including fixed deposits.

DHFL, being probed by the enforcement directorate (ED) for alleged money laundering, said it was trying to work out a resolution in the interest of all stakeholders.

Last week, the UP government had recommended a CBI probe, while three serving and retired UPPCL officials were arrested for their alleged role in  investment against norms and without seeking authorisation.  Nearly 45,000 UPPCL employees are on the  warpath and have demanded the state government to undertake the responsibility of repayment.

According to the firm, DHFL was at its peak in September 2018 disbursing close to Rs 3,500 crore of retail loans per month, when liquidity crisis hit the NBFC sector. 

Thereafter, DHFL had to halt “all new originations” and adopt a cautious approach to conserve liquidity. Yet, without any fresh funding, the company repaid over Rs 44, 000 crore to various stakeholders, including a payment of approximately Rs 7,575 crore to FD holders. The company referred to “media reports” implying that UPPCL CPF Trust and UP State Power Sector Employee Trust had invested funds and that the firm had not honoured the maturity/interest payment on due date.

DHFL said in case of these deposits since 2017, nearly Rs 1,864 crore had already been repaid towards principal and an amount of Rs 208 crore paid as interest thereon.

It claimed all maturity/interest payments due till September 30, 2019 had been made by the company and later payments were stopped following the court directives.

DHFL maintained from March 2017 till December 2018, when these deposits were placed, DHFL enjoyed highest rating of ‘AAA’ (FD) by CARE and BW R FAAA by Brickworks, “indicating highest degree of safety regarding timely servicing of financial obligations.”

It claimed deposits accepted by the company are in full compliance with the guidelines laid down by National Housing Bank for acceptance of public deposits, and no guidelines have been breached.

“DHFL is making and will continue to make every effort to ensure that no discomfort is caused to the fixed deposit holders including the UPPCL CPF Trust and UP State Power Sector Employee Trust who have entrusted the Company with their hard earned money and savings,” the communiqué said.

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