DHFL plunges 5% as RBI to refer NBFC to bankruptcy court
DHFL is set to become the first NBFC to go for bankruptcy resolution.
DHFL is set to become the first NBFC or housing finance company (HFC) to go for bankruptcy resolution. The central bank also superseded the board of the third largest pureplay mortgage lender, citing governance issues and severe liquidity crisis which led to a string of defaults.
The RBI also appointed Indian Overseas Bank's former managing director and CEO R Subramaniakumar as its administrator.
"We also intend to shortly initiate the process of resolution of DHFL under the insolvency and bankruptcy code and would also apply to NCLT seeking appointment of the administrator as the insolvency resolution professional,” the RBI statement added.
The move comes after the Centre on November 15 empowered the central bank to refer stressed NBFCs and HFCs having assets worth at least Rs 500 crore to insolvency court.
DHFL is one of India's top defaulters, and owes close to Rs 1 lakh crore to its debtors, which include banks and mutual funds, Reuters reported.
The shares of the company later recovered and closed 4.96 per cent higher at Rs 21.15 on BSE.