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DHFL stops fresh deposits, premature withdrawals after downgraded credit ranking

ANI 

Cash-strapped Dewan Housing Limited (DHFL) said on Wednesday that it will not allow premature withdrawals of its deposits with immediate effect in an effort to reorganise its

The 'controversial' housing company has also stopped accepting fresh public deposits and renewals of existing deposits.

Late last week, Brickwork Ratings downgraded DHFL's credit ranking to 'BBB-plus' from the earlier 'AA-negative' and put it on 'a credit watch with negative implications.' BBB is considered a non-investment grade rating.

"In this connection, please note that the company has stopped acceptance and renewal of fixed deposits due to the recent revision in the credit rating of fixed deposits programme, which is below the minimum rating prescribed under National Housing guidelines," it said in a statement.

"In view of the recent revision in the credit rating of our programme, acceptance of all fresh deposits, as well as renewals, has been put on hold with immediate effect," said DHFL in a notice to its distributors.

"Further, to help us re-organise our liability management, pre-mature withdrawal of deposits has also been put on hold. However, we will continue to honour all premature deposit withdrawal in any medical or financial emergency."

The company said it remained solvent. "Over the last few weeks, there have been several unwarranted speculations in the market about the creditworthiness of DHFL. We assure you that we stand committed to honouring all our liability payments and have demonstrated this by repaying liabilities amounting to approximately Rs 30,000 crore since September 2018, without a single day's delay," the notice said.

The firm has been trying to sell non-core assets, including its education arm. DHFL said recently that it was in talks with strategic investors to sell a significant stake in the original company.

In January, accused DHFL promoters of committing financial fraud by creating shell companies. A total of 32 Indian and lent Rs 97,000 crore to companies with many borrower companies having the same addresses, directors, and auditors, the had alleged.

Audit firm T P Ostwal & Associates LLP had found Cobrapost's allegations baseless and without merit.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 22 2019. 15:29 IST
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