InvestorQ : Why has DSP MF filed a legal case against Dewan Housing and what could it mean for the company?
Ria Jain made post

Why has DSP MF filed a legal case against Dewan Housing and what could it mean for the company?

Answer
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Anu Biswas answered.
1 year ago


This is very specific to DSP MF and the case has been filed because Dewan Housing could not pay 50% of the total outstanding of Rs.150 crore to the fund. DSP is the first fund to initiate legal proceedings for recovery of the money and the only worry is that other mutual funds could also initiate similar legal proceedings for recovery of their money. Banks are now worried that it could hamper the resolution plan that they are working on with Dewan because the company owes a total of Rs.99,000 crore to banks, insurance companies and mutual funds in all.

Banks have signed an inter creditor agreement with Dewan but MFs are not part of the agreement. Hence MFs have no choice but to recover their monies through the legal route.