Cease and Desist Notice to Kapil Wadhawan by 63 Moons restraining the promoter from alienating properties

Cease and Desist Notice to Kapil Wadhawan by 63 Moons restraining the promoter from alienating properties

One of the recent developments in the Former Chairman and Managing Director of Dewan Housing Finance Corporation Ltd (DHFL), Kapil Wadhawan's case (who is currently in judicial custody) is that a Cease and Desist Notice has been sent to the promoter, by M/s. 63 Moons Technologies Ltd., stating that any attempt to alienate/deal with the property/assets in any manner whatsoever shall be in complete violation of the order of the Hon'ble Madras High Court, wherein there is a clear order of Injunction thereby restraining the promoter from dealing with any of the movable or immovable properties in any manner whatsoever.

According to the Notice, despite the aforesaid restraint, a letter dated 17.10.2020 has been issued to the administrator of DHFL, wherein far-fetched and illegal assertions of offering various projects to be monetized have been made by the promoter. It has also been specifically mentioned in the notice that the order of the Hon'ble Madras High Court has to be obeyed in letter and in spirit and no one can act in violation or derogation thereof failing which appropriate proceedings against the promoter including but not limited to proceedings under the Contempt of Courts Act, 1971 will be initiated.

In this matter, which involved siphoning off thousands of crores of public money for personal gains, a letter has recently been addressed to the administrator appointed by the Reserve Bank of India wherein Mr. Wadhawan has offered 10 projects valued at Rs. 43,879 crore to be monetized to ensure repayments to the lenders of DHFL and also to ensure successful resolution of DHFL.

As per the communication, these projects also include some marquee ones such as Juhu Galli Project (potential revenue whereof is Rs. 32,000 crores) and 'Irla Project' (potential revenue whereof is about Rs. 4,400 crores). It has also been put forth by Mr. Wadhawan, that he volunteers to handover all his right, title and interest in these projects towards settlement of all claims and loans availed.

Grant Thornton has issued a Report, which contains findings of siphoning of Rs. 20,000 crores of lenders' money to the promoters of DHFL and to entities owned or controlled by them. As per the newspapers' report out of the claims of Rs. 94,900 crores lenders may face a haircut of Rs. 65,000 crores since no bidder has offered more than Rs. 20,000 crores to acquire the crisis laden DHFL under the IBC. This becomes another matter of concern for those who have lost their monies.

With this settlement offer coming in the picture, question arises with respect to the source of the funds. Immediate attachment of all assets of Kapil and Dheeraj Wadhawan and their family members also of all assets/entities owned and controlled by them and custodial interrogation can be some helpful measures.

The injunction had been prayed for by the Applicants (M/s. 63 Moons Technologies Ltd.) with respect to the fact that they have invested in the debentures issued by the defendants (DHFL, its promoters, directors etc.) and having induced not only the applicant but also the investors the defendants have siphoned the public money and invested in Shell companies and tried to default the investors.

According to 63 moons, the Economic Offences Wing (EOW), the Enforcement Directorate (ED) and Serious Fraud Investigation Office (SFIO) need to get to the bottom of his financial dealings and reveal from his source of assets.

The Madras High Court had passed an Order of ad-interim injunction against the defendants restraining them or their servants/agents or any other person from in any manner transferring, alienating, selling, disposing of, dealing, parting with possession and/or encumbering and/or creating any third party right or interest in any other asset and/or properties pending disposal of the main suit.

This interim order has been further extended to 23.11.2020.