INSUBCONTINENT EXCLUSIVE:
In July, DHFL said it was "undergoing substantial financial stress".The resolution plan of one of country's biggest shadow banking firms,
collapse of another financial firm, IL-FS, stoking fears of a broader contagion.In July, DHFL said it was "undergoing substantial financial
stress" and may not survive as a going concern
Its auditors then raised several red flags around its financials, deepening worries that a crisis in the shadow banking sector was far from
The firm has submitted a revival plan to the banks which is being evaluated.DSP Mutual Fund said on Friday it had initiated legal action
knowledge said they now feared that DSP's action would push other creditors to take similar legal action against DHFL to recover their
dues."After one firm files a case, there are other parties as well that end up taking legal recourse, and we are worried about that now,"
said one of the bankers, who is part of the restructuring process.DSP in a statement on Friday said its legal action was aimed at recovering
its remaining dues and it had not done anything to disturb DHFL's rescue plans
DHFL did not immediately reply to an email seeking comment.Banks have signed an inter-creditor agreement to come up with a solution to
Mutual funds that are not part of that agreement can take legal action to recover their dues.However, central bank rules say that
cleared, making it critical for mutual funds to be on-board with the plan."The focus should have been on resolving DHFL's crisis urgently,
but this legal action will only end up adding to the problem and stalling the process," said the second source.Get Breaking news, live
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