Tata Mutual Fund (MF) has approached the National Company Law Tribunal (NCLT), seeking repayment of over Rs 120 crore worth of dues from Dewan Housing Finance Corporation (DHFL). People in the know said that the fund house has sought certain disclosures from the debt-troubled housing finance company.
The next hearing on the matter is expected to be held in the second week of November. Industry insiders said the slow pace of progress on the inter-creditor agreement (ICA) may prompt other MFs to take the legal route to recover their dues as well.
Among other fund houses, Nippon India MF, Edelweiss Asset Management Company (AMC), Kotak AMC and Axis AMC have moved the Bombay High Court to recover dues. Few fund houses are trying to support the possible resolution plan under the ICA framework, and have refrained from taking the legal route yet.
"MFs will be taking a call depending upon what they see is the best option to protect unit-holders' interests," said a fund manager.
Recently, a draft audit report by KPMG alleged that DHFL could not provide a robust and well-defined tracking mechanism for end-use of funds disbursed by the company.
The audit report alleged that repayments worth Rs 12,541 crore to 28 entities (allegedly linked to the DHFL promoters) were not traceable. According to banking sources, the audit report will make it difficult to clear a resolution plan till the company clears questions pertaining to the said disbursements.
On Friday, the share price of DHFL ended five per cent lower to close at Rs 17.55. Since September, when the IL&FS crisis broke out, the company has seen 97 per cent of its market wealth being eroded.