Smelling the rat in the DHFL-COC Resolution Process: a letter to the President of India

Posted on 24/03/2021

Updated on 28/06/2022

The Honourable President,

Republic of India,

Rashtrapati Bhavan,

New Delhi- 110004

Sub: Some opaque facts and questions related to the DHFL scam and the role of the DHFL-COC members

Dear Sir,

Hope you and your family are doing well. This letter is for informing you regarding some anomalies and opacities in the Dewan Housing Finance Corporation Ltd. (DHFL) scam⤡. The letter is divided into two parts: part I depicts some of the facts and part II is dedicated to the elaboration of those facts with few humble and crucial questions as alleged by some conspiracy theorists.

I. ON THE SUSPICIOUS BEHAVIOR OF THE AUTHORIZED REPRESENTATIVE OF THE FIXED DEPOSIT HOLDERS:

This is for your kind information that we have observed some anomalies in the behaviour of Ms. Charu Sandeep Desai, Authorized Representative of the Fixed Deposit Holders of the Dewan Housing Finance Corporation Ltd.

We, the undersigned, have sent (a) three consecutive mails (cf. evidence-1) from our respective e-mail IDs; (b) one Whatsapp message (cf. evidence-2); (c) the following question in the Webinar conducted by Ms. Desai (no evidence available to us). The content of all these (a), (b) and (c) is the same. It is as follows:

“It is being circulated in the media that only the highest bidding price will be distributed among the lenders/investors/creditors’ dues/investments. In that case:

a) Will the distribution of lenders’/ investors’/creditors dues (especially FDs) only be on the basis of the buying price of the bidders?

b) Will it also involve the working capital, revenue generation or otherwise profits, monthly income, recovery of loans, and the overall assets of the DHFL? Will it not follow the waterfall mechanism in case of FD holders’ (may be deferred) repayment? What will be the net sales, income from operations, other operating income per annum, the profit, overall assets of DHFL, a running company?

In the case of FD holders, will not all these variables (Question b) be considered for full payment (with interest) of their investments?

We are in big trouble with agony/anguish/anxiety. Kindly remove our confusion regarding the repayment of our dues.”

EVIDENCE-1

EVIDENCE-2

In all these three cases, she did not care to answer our simple question. On the other hand, it is reported that she talked to some persons, preferred by her, over the telephone immediately after the Committee of Creditors (COC) meeting (kindly check her call list by instructing the CBI). As reported by some of those privileged persons, she revealed the minutes of the meeting before its publication in the public domain. Thus, if it is proved to be true, it has violated the following service conduct:

All India Services (Conduct) Rules, 1968. 9.

Unauthorized communication of information—No member of the Service shall except in accordance with any general or special order of the Government or in the performance in good faith of duties assigned to him (sic), communicate directly or indirectly any official document or part thereof or information to any Government servant or any other person to whom he (sic) is not authorized to communicate such document or information.

On the other hand, we are getting stock “copy and paste” answers from the administrator, Mr. R Subramaniakumar, except once on 02/04/2020 (cf. Evidence 3).

EVIDENCE- 3

However, when we were asking for publicly displaying the approved Resolution Plan of the Piramal Capital and Housing Finance Ltd, a non-listed company, to the RBI Governor along with R Subramaniakumar and Charu Sandeep Desai, none of them paid any heed to our plea. We have written the following letter (cf. Evidence-4), dated Feb 19, 2021:

“After the approval of the benevolent resolution plan of the COC on DHFL by the RBI, please publicly publish it so that the whole world can view the benefits of your tiresome work.

We are requesting you to kindly provide us with a copy of the approved resolution plan for showing the excellent job done by you and FD-holders’ representative by putting your blood and sweat. We must appreciate the efforts made by you and your colleagues for the benefits of all the creditors, shareholders, MF Holders, NCD and FD Holders. We are way too happy after such a great resolution.”

This letter was also tweeted⤡ on 21/02/2021.

EVIDENCE-4

Surprisingly enough, one non-FD-holder, a self-proclaimed “National Convener, DHFL-FD-holders Pan India” (Non-registered body) had instantly got the resolution plan from Ms. Desai from an email ID (cf. Evidence 5), unknown to us (dhflarforfd@gmail.com), when we asked for it through that self-proclaimed “National Convener”, though we did not primarily have the permission to open that pdf file on Google Drive. After much requests, we have got it (please note that the minutes of the meetings and the RP in non-downloadable image form are only accessible to the customers by finishing some prescribed norms for maintaining secrecy. Why is so much secrecy maintained?).

EVIDENCE-5

Moreover, the central bank of India, i.e., the functioning of the RBI has also been challenged.

A PIL was filed by Subramanian Swamy, praying for the CBI or ‘any other competent authority to investigate illegalities committed by RBI officials’ in the discharge of their functions.

Subramanian Swamy asks SC for CBI probe into RBI official’s role in scams VIEW HERE ⤡ (as reported on February 2, 2021)© Business Standard

Not only that, Subramanian Swamy commented on Shri Shaktikanta Das (BA and MA in History!!!), the present Governor, the Reserve Bank of India:

“The new governor (of RBI) is highly corrupt. I got him removed (from the finance ministry). I am calling Shaktikanta Das a corrupt person. I am surprised that the man I got removed from the finance ministry for corruption was brought in as governor.”(emphasis added. as reported on Dec 23, 2018 ⤡) ©Scroll.in

This is also along with the line of Nobel laureate economist Abhijit Vinayak Banerjee’s comments (as reported on December 11, 2018 ⤡ ©Financial Express) on the decision to appoint Shri Shaktikanta Das as RBI-Governor arises a lot of “frightening” questions about governance issues at key public institutions like the RBI.

We are scared—frightened after reading such reports. And Mr. Das did not file a defamation case against such allegations! Under whom is our financial system operating? Are we financially safe?

II. QUESTIONS RAISED OUT OF SUCH SUSPICIOUS BEHAVIOUR

Some conspiracy theorists (“Urban Naxals” or “Anti-Nationals”) smell a rat after knowing all this evidence. As we are suffering from psychosomatic disorders, especially persecutory paranoia, we are reiterating their questions for rearranging our distorted thoughts caused by such financial abuse. All these incidences cited above have also led us to the following questions:

1. Cobrapost mentioned about “political donations” VIEW HERE ⤡ (As reported on 29/01/2019 ©News Laundry). Who are getting these “political donations” or the beneficiaries of this political charity? The richest ruling party of India?

For details please view:

CONSEQUENCES OF CRONY AND MONOPOLY CAPITALISM IN INDIA: THE CASE OF DHFL SCAM VIEW HERE ⤡

2. Just before the day of publication of the Cobrapost report, Mr. Ajay Piramal predicted the following:

Be prepared for one or two major shocks in NBFC sector: Piramal VIEW HERE ⤡ (As reported on January 28, 2019 ©The Hindu)

How did he know it in advance, when official vigilant agencies had cut a sorry figure?

3. 1 and 2 entail the massive failure of all the vigilant agencies, Cf. (Sec-I of the document: Confession Of A Victim Of Financial Abuses View Here ⤡) Are they not responsible for our misery? Were they enjoying a state of deep slumber before the publication of a scam by a private newspaper?

4. Conspiracy theorists have alleged that this particular case is simulated, manufactured and crafted for handing over a running company to a non-listed company through reverse merger. This company is owned by the father of the damad (son-in-law, cf. ‘Who takes Mudra loans, damaads?’ Sitharaman’s dig at opposition over crony capitalism remark as reported on Feb 12, 2021⤡) of a privileged business tycoon, who is preferred by the present ruling party. According to conspiracy theorists , it is usual in the context of crony and monopoly capitalism or in oligarchy.

5. It is observed that there are clashes among some NHB acts and the IBC. Why is there no coherence in the policy-makers’ minds? The newly-introduced IBC has been amended once (2018) and is going to be amended further. That entails: it is not a full-proof system. The second-amendment was challenged in the apex Court, which upheld the same with a small note, which said: “the law came as a bolt from the blue”in its 450+ pages verdict.

Supreme Court Upholds Sections 3, 4 & 10 of IBC Amendment Act 2020 VIEW HERE ⤡ (As reported on 19 Jan 2021) ©Live Law

6. Therefore, conspiracy theorists raised another question: why is the resolution process not publicly available so that the whole world can see the judicious benevolence of our executive, legislature and the judiciary? We have also requested the administrator and the AR (Evidence-4) for publicly displaying the resolution plan. We have got only a cut and paste reply. Why?

7. According to the RP, the overall distribution of the assets, bidding price, profits and gains are as follows (as calculated by Mr. Ashok Khemka, IAS, in his Tweet⤡, 16/01/2021):

WILL THIS BE A RESOLUTION SCAM?
BOOK VALUE OF THE ASSETS	93, 700 CR
FRAUD APPLICATION U/S BEFORE NCLT	33, 000 CR
BIDDER’S VALUE	32, 250 CR
WHITHER GOES THE BALANCE?	28, 450 CR?

WHO LOSES?
FINANCIAL CREDITORS	55, 000 CR
SHAREHOLDERS	6, 300 CR
STATUROY DUES	88 CR
OPERATIONAL CREDITORS	70 CR
TOTAL	61, 458 CR

WHO GAINS?
ADVISORS	130 CR
EARLIER DHFL PROMOTERS	???
NEW OWNERS	???
TOTAL	61, 458 CR
	*ABOVE FIGURES ARE ESTIMATES*

The total auditing report is too opaque.

8. Conspiracy Theorists have also raised another question regarding the present Governor of the Reserve Bank of India (RBI), Mr. Shaktikanta Das, by reiterating Subramanian Swamy and Abhijit Vinayak Banerjee’s impressions on his credibility.

9. It is also alleged by those “Urban Naxals” or “Anti-Nationals” that the rampant bankruptcies, failure of the IBC for generating “speedy one-stop solution”, also prove the failure of painful demonetization (cf. Sec. IV of the document CONSEQUENCES OF CRONY AND MONOPOLY CAPITALISM IN INDIA: THE CASE OF DHFL SCAM⤡).

All these questions, if true, entail that we are living within an Orwellian state, where “all animals are equal, but some animals are more equal than others”. It is not our perception but of Justice Srikrishna, who himself drafted the Data Protection/Privacy Bill (2019), said that the bill would usher in an era of “Orwellian State with big brother snooping on us”⤡.

We are even more worried after going through the following two reports:

· India Is No Longer a Democracy but an ‘Electoral Autocracy’: Swedish Institute ⤡ (As reported on 11^th March 2021, © The Wire)

The Freedom House also dropped India from the list of “Free Countries” in its annual report entitled “Democracy under Siege”.

Hope you, the “ceremonial head” (a la Dr. Babasaheb Ambedkar) of the Indian republic, along with your family, are living happily in the Rashtrapati Bhavan while we keep on waiting for Godot. Please pardon us for quoting the conspiracy theorists’ undocumented questions as we are suffering from anxiety disorders—we have become mad.

Yours Faithfully,

Dr. Debaprasad Bandyopadhyay

Mrs. Rupa Bandyopadhyay

Mr. Akhar Bandyopadhyay

ON BEHALF OF ALL ANGUISHED, AILING DHFL FD HOLDERS [USUAL DISCLAIMERS APPLY]

COPY TO:
1. The Honourable Prime Minister, Government of India

2. The Honourable Minister of Home Affairs, Government of India
2. The Honourable Finance Minister, Government of India
3. The Honourable Governor, Reserve Bank of India, Government of India
4. The Honourable Administrator, Reserve Bank of India, DHFL, Government of India
5. The Honourable Authorised Representative acting on behalf of the Public Depositors, DHFL, Government of India

बहुजनहिताय बहुजनसुखाय च॥

(“For the happiness of the many, for the welfare of the many”)