The Reserve Bank of India (RBI) on Wednesday superseded the board of bankrupt Dewan Housing Financial Corporation Limited (DHFL) and placed the HDFL under an administrator. The central bank took these steps over defaults by DHFL and said that the process of resolution of the company under the insolvency and bankruptcy rules will be initiated soon.
The RBI released a statement saying that it decided to supersede DHFL Board of Directors due to concerns over governance and the debt-laden firm's failure to pay existing debts.
"The Reserve Bank has today superseded the Board of Directors of Dewan Housing Finance Corporation Limited (DHFL) owing to governance concerns and defaults by DHFL in meeting various payment obligations," RBI said in a statement.
The RBI statement added that R. Subramaniakumar, ex-MD and CEO of Indian Overseas Bank (IOB) has been appointed as the administrator of DHFL under Section 45-IE (2) of the Act.
"The Reserve Bank also intends to shortly initiate the process of resolution of the company under the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 and would also apply to the NCLT for appointing the Administrator as the Insolvency Resolution Professional," RBI said in its statement.
According to reports., DHFL is one of the top defaulters in the country with pending dues valued at almost Rs 1 lakh crore.