Leading depository CDSL has frozen shareholding of debt-ridden mortgage lender DHFL's promoters because of delay in announcement of the company's financial earnings, sources said on Monday.
The decision has been taken after the company failed to announce its first quarterly results, they said.
However, sources close to Dewan Housing Finance Corporation Ltd (DHFL) said the company results are expected to be announced in next few days, for which the board meeting is expected to be called for, they added.
DHFL, which has been severely impacted by the NBFC crisis which unfolded late last year following the IL&FS bankruptcy, has defaulted on multiple commitments.
The Wadhawan family, which owns a little over 39 per cent in the DHFL, has been looking at various ways of coming out of the stress. These include selling stakes in group entities, including in the flagship to the extent of giving up half of their stake.
Sources on Monday said CDSL, which allows investors to deposit securities by opening an account in electronic form (dematerialised), has frozen the entire shareholding of DHFL's promoters after the company delayed announcement of financial results.
Delay in announcing the results could be due to resignation of DHFL's auditor.
"Since DHFL's auditors had resigned and a new auditor had been appointed at the AGM held on September 28, the company's first quarterly results had been delayed," one of the sources privy to the development said.
Query sent to Central Depository Services Ltd (CDSL) about freezing of promoters' holding remained unanswered, while spokesperson of DHFL declined to comment as the company is going through a silent period because of resolution plan.
Under the Listing Obligations and Disclosure Requirements (LODR) regulation, a company is required to submit financial results on quarterly basis.
A depository can freeze the entire promoter shareholding of a firm in case of non-compliance with listing rules.
According to market experts, if any listed entity's results is delayed, the exchanges hold on-account the shareholding of the promoters of the said entity.
Hence this matter is procedural and no undue speculation is needed, they added.
In late September, DHFL floated a draft resolution plan under which it proposes to convert debt into equity. The proposal was subject to approval of investors and bankers.
The housing financier is supposed to reach a debt resolution plan with its lenders shortly so that new funds start flowing into the company.
To generate capital, DHFL has sold its strategic investments, even in core retail financial services firms like Avanse, Aadhar, DHFL Pramerica AMC.