Subhash Chandra Loan Controversy - NCLAT To Hear Creditors Plea On Tuesday
The creditors in Subhash Chandra’s insolvency case include several financial institutions, among them HDFC Bank, LIC Housing Finance, Union Bank of India, Canara Bank and Sammaan Capital, formerly known as Indiabulls Housing Finance, which initiated the insolvency proceeding against the Zee chairman in 2022
Mumbai: The National Company Law Appellate Tribunal (NCLAT) on Monday agreed to hear on Tuesday (September 1) the plea made by some creditors challenging an earlier order of the National Company Law Tribunal (NCLT) approving the repayment plan of Zee Group founder and chairman Subhash Chandra.
On August 25, the NCLT approved Chandra's repayment plan, under which ₹6.25 crore is to be paid to creditors and ₹25 lakh towards insolvency-process costs, against admitted claims of around ₹22,006.57 crore. The plan translates into a recovery of only about 0.03 per cent of the admitted claims and a haircut of around 99.97 per cent for creditors.
Solicitor General Tushar Mehta, representing LIC Housing Finance sought an urgent listing of the petition and requested the appellate tribunal to hear the matter at 2 pm during the day. However, the NCLAT agreed to take up the matter on Tuesday at 10:30 am.
“There are two or three important questions which are to be decided, you know, and if those findings are correct, then, my lord, possibly we will be having a complete loss of intent and purpose of IBC,” said Mehta.
The creditors in Subhash Chandra’s insolvency case include several financial institutions, among them HDFC Bank, LIC Housing Finance, Union Bank of India, Canara Bank and Sammaan Capital, formerly known as Indiabulls Housing Finance, which initiated the insolvency proceeding against the Zee chairman in 2022.
Lenders have voiced their concern on the negligible recovery, the verification of claims and the participation of entities allegedly associated with Chandra in the voting process. Analysts have also questioned the repayment plan and its impact on future personal guarantee cases as lenders may become cautious while pursuing similar cases.
A total of 23 creditors participated in voting on the repayment plan, which received 80.81 per cent approval by voting value although big lenders opposed the repayment plan.
Subhash Chandra on Instagram Live:
Meanwhile Chandra on Monday addressed questions about his personal insolvency case and the Rs 22,000 crore claims and guarantees controversy during an Instagram Live session on Monday. He said he had not personally borrowed any money but acted as a guarantor for loans taken by various other companies. He said he had provided guarantees for around 18 to 20 companies that were directly or indirectly linked to the Essel Group.
He assured that discussions had taken place with the actual borrowers and the remaining dues would be paid back by the borrowing entities.
On his personal wealth, Chandra said he had declared assets worth around Rs 39 crore in his affidavit to the Election Commission.
He said his current total assets stand at around Rs 31 crore. He also admitted that giving personal guarantees was one of the biggest mistakes of his career and led to his current situation.
He also revealed plans to launch a new startup with some friends and business partners, saying he would move ahead with the venture while following all legal requirements.
Shares of Zee Entertainment Enterprises closed down 7.88 per cent to Rs 93.55 for the day on the BSE.
