The Bombay High Court (HC) on January 15 ordered setting up of a three-member panel to evaluate and sells assets of the embattled Housing Development and Infrastructure (HDIL). The fund thus accumulated would be used to pay off the debt the builder owes crisis-hit PMC Bank.
Last month, the Enforcement Directorate (ED) filed a 7,000-page chargesheet against HDIL's promoters, in connection with their alleged involvement in the Rs 43.55-billion Punjab and Maharashtra Cooperative (PMC) Bank scam. HDIL promoters Rakesh Wadhawan and his son Sarang Wadhawan, have been in the ED's custody, since October 2019.
The RBI had earlier imposed financial restrictions on PMC Bank depositors, following the discovery that the bank, in cahoots with the HDIL promoters, concealed from the banking regulators' scrutiny, huge loan defaults by the latter. Over 73 per cent of the bank's advances went to HDIL Group, which led to a huge crisis when the Group defaulted on repayment.
The HDIL trouble
As per a PropTiger.com report, plunging sales and deepening liquidity crisis have already pushed the builder towards bankruptcy, with the National Company Law Tribunal (NCLT) admitting an insolvency plea of Bank of India, against it in August, over a loan default of Rs 5.22 billion. The National Company Law Appellate Tribunal (NCLAT), however, accepted the builder's plea, challenging the move. If the builder loses, it would join several other developers based in the NCR, currently facing insolvency proceedings, including Amrapali, Jaypee, Unitech and 3C.
Apart from Bank of India, several other financial institutions have moved several petitions against HDIL in the Mumbai Bench of the NCLT, over loan defaults, under Section 7 of the Insolvency and Bankruptcy Code (IBC). These include Syndicate Bank, Corporation Bank, Dena Bank, Union Bank and Indian Bank.
In 2018, the developer, which is listed on both BSE and NSE stock exchanges had settled similar petitions filed by J&K Bank and Andhra Bank, in connection with defaults running up to Rs 3.74 billion.
Once counted among the fastest moving real estate developers in the county, HDIL has completed more than 100 million sq ft of construction since its inception in 1996. Apart from residential and commercial real estate, the company is also active in slum redevelopment projects.
HDIL also has at least 10 residential projects, mostly in Mumbai that are in various stages of construction. These include Majestic Tower (Nahur West), Whispering Tower (Mulund West), Residency Park II (Virar), Premier Exotica (Kurla West), Harmony (Goregaon West), Metropolis Residence (Andheri West), Galaxy Apartments (Kurla East), Paradise City (Palghar), HDIL Hyderabad, etc.