| HDFC (Housing Development Finance Corporation)
HDFC (Housing Development Finance Corporation)
The in-house legal team has two verticals, corporate legal and retail legal. The corporate legal deptarment functions as a strategic and policy level advisor to the management as well as to the retail legal team which is spread across more than 40 locations in the country to cater to the legal requirements with respect to HDFC’s retail housing business. Sudhir Kumar Jha is an advisor to the top management and HDFC’s board of directors for all aspects of the corporate as well as retail business, as well as the strategic and tactical decisions with respect to all the group companies, including reorganisation or restructuring. Jha is also the principal negotiator for HDFC with respect to strategic investments, divestments, mergers, acquisitions, major projects, new set up of any business, and he is the interface and primary link of HDFC with all domestic and international regulators and enforcement agencies. Under the aegis of the general counsel, the corporate legal function is driven by four senior lawyers, namely, joint general manager Nimish Bhatt, deputy general manager Annindya Banerjee, assistant general managers Samir Naik and Rananjay Singh. These officers have experience of around 17-20 years in the legal advisory field. Bhatt and Banerjee are primarily involved in the matters which require strategic or policy level inputs as well as in new processes and documentation, regulatory, enforcement and audit interface, impact analysis of new laws as well as strategic litigation. Bhatt also advises the treasury function with respect to the legal issues on shareholders rights, fund raising i.e. equity as well as debt, investments and M&As. Banerjee is also the national retail legal head and in terms of this role he also guides the legal teams spread across the country on policy level. Naik is primarily involved in strategic legal issues of various subsidiaries and associates of HDFC to the extent they involve the shareholders – investee company relationship as well as other business transactions which are undertaken within the Group. Singh is the legal advisor with respect to the corporate loan portfolios of HDFC. He is also involved in fund, raising exercises as well as investments and M&As.
What are the most significant projects that the legal team has been involved with recently?
The IPO of HDFC Standard Life Insurance Company by way of an offer for sale by HDFC and Standard Life as promoters in 2017. A similar issue was handled by the legal team in 2018 for HDFC Asset Management Company. The acquisition of Apollo Munich Health Insurance Company for an eventual merger with HDFC Ergo General Insurance Company (a subsidiary of HDFC); Raising equity capital in 2018; The amalgamation of GRUH Finance, a listed subsidiary of HDFC and Bandhan Bank; The sale by of HDFC’s entire stake in its wholly owned subsidiary companies, HDFC Developers and HDFC Realty, to Quikr India; and the amalgamation of five of HDFC’s wholly owned subsidiaries, Windermere Properties Private, Haddock Properties, Grandeur Properties, Winchester Properties and Pentagram Properties with HDFC.
Subsidies and GST incentives for affordable housing have resulted in a substantial push for the real estate sector for construction as well as the buy side for retail individuals and consequently demand for funding on retail as well as the corporate side has gone up which has been an opportunity for HDFC. Judicial pronouncements by tribunals as well as the Apex Court of India have leaned towards protection of retail home buyers particularly those who have availed loans to buy a home. This protective change has also been included in the recent amendments to the Insolvency and Bankruptcy Code which makes the retail home buyer a financial creditor who has a right to vote in deciding the fate of the developers who do not deliver apartments as promised to the buyers. The impact on the legal team for this change has been in the nature of providing an in-depth analysis of various scenarios in which recovery of funds can be jeopardised or protected in cases where we are only funding the retail home buyer or only the developer or when we are considering to fund both. It is pertinent to note that as the legal framework in the real estate and financial sector has moved from “sale and recovery” to a “resolve” approach, a the real time analysis of every individual case is required as a one-size-fits-all approach will not protect the investments of all the home buyers, protect the funding of HDFC while also ensuring that any stressed assets project gets a proper resolution.
HDFC’s focus will be two-fold viz. deepest outreach within India to provide housing for all and doing its best to fund infrastructure growth in the company and continue to enhance the shareholder value in the parent company as well as giving strategic guidance to all the companies in the group to maximise value and wealth creation. The legal team is at the forefront in its contribution towards achieving these goals. HDFC’s legal team will be directly involved in evaluating the impacts of the legal framework changes impacting the HDFC conglomerate with respect to any possible increase in stake or divestment or restructuring or change in business model which may be needed or for any mergers or acquisitions which are in the pipeline or are to be considered in the future.
HDFC has been built on the core values of trust, integrity, transparency and professional service. The culture of HDFC’s legal team is driven primarily by these values. For the creativity of the lawyer to work for the best interest of the organisation and create a perfect balance between the changing organisational needs in a competitive environment while ensuring compliance of laws in letter and spirit, reliance on the in-house lawyer with full faith and providing freedom to provide unbiased legal advice is of utmost importance. The same has been created and maintained for the growth of the individuals in the legal team as well as the organisation.